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Speaker 1: This is Master's in Business with Barry Ridholds on Bloomberg Radio.

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Speaker 1: This week on the podcast, Liz Hoffman comes in to

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Speaker 1: tell us about writing Crash Landing, which I found to

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Speaker 1: be a fascinating book about telling the story of the

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Speaker 1: pandemic that we all just live through, the economic dislocation,

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Speaker 1: the health risks, just the mayhem that took place. But

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Speaker 1: from the perspective of a number of corporate CEOs, Bill

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Speaker 1: Ackman of Pershing Square Capital, the hedge fund that had

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Speaker 1: a couple of amazing trades based on this, the CEO

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Speaker 1: of Delta, of Hilton, of Ford, of Goldman Sachs of

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Speaker 1: Morgan Stanley of Airbnb. Really a fascinating discussion from a

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Speaker 1: perspective that I think you probably are unfamiliar with. You know,

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Speaker 1: it feels like we all went through more or less

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Speaker 1: the same thing. That turns out not necessarily to be true.

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Speaker 1: Some of these people were dealing with inordinate stress, tremendous risk,

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Speaker 1: concerned that their businesses and their companies, some of which

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Speaker 1: have been around the United States for a century or more,

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Speaker 1: we're going to go out of business. And it really

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Speaker 1: is a fascinating tale told from a really interesting perspective.

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Speaker 1: I really enjoyed it, and I think you will find

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Speaker 1: it to be delightful summer reading with no further ado.

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Speaker 1: My conversation with Semaphor's Liz Hoffmann discussing Crash Landing.

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Speaker 2: Thanks, Arry, it's great to be here.

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Speaker 1: I have to tell you I don't always say this.

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Speaker 1: I really enjoyed the book. I found it to be

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Speaker 1: a fascinating look into an experience we all had and

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Speaker 1: thought we shared together, but it turned out a lot

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Speaker 1: of people had very, very different experiences. We'll get into

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Speaker 1: that in a minute. Let's just start with your background.

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Speaker 1: You have a master's degree from the Northwestern School of Journalism.

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Speaker 1: Was the plan ways to cover finance? What led you

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Speaker 1: into this area?

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Speaker 2: No, not at all. I started out as a sports

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Speaker 2: reporter in college, really Division three athletics. If that's your

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Speaker 2: if that's your thing.

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Speaker 1: What the time, That's what My college was, Division three football,

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Speaker 1: not exactly a hotbed of not a powerhouse.

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Speaker 2: No, but but thought I wanted to cover sports. Actually

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Speaker 2: I played sports growing up, and I really liked that

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Speaker 2: kind of reporting, which is sort of really beat reporting

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Speaker 2: at its at its most basic, right, and then you

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Speaker 2: know at some point, well I went to grad school

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Speaker 2: because I graduated college in two thousand and eight and was,

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Speaker 2: shockingly enough, yeah, having trouble getting a newsroom job. And uh,

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Speaker 2: and I said, I'll go get a master's and things

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Speaker 2: will be better in two thousand and nine because these

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Speaker 2: are one year programs, right. So obviously, I, you know,

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Speaker 2: economically minded from the jump, but no, I really wanted

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Speaker 2: to be a sports reporter. And then at some point

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Speaker 2: it ocourred to me that even if you do that

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Speaker 2: and you get to the pinnacle of that career, your

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Speaker 2: your reward is to live in Bristol, Connecticut, right orn't

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Speaker 2: for ESPN, And you know, it was really, frankly, just

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Speaker 2: like beggars couldn't be choosers. I graduated in o nine.

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Speaker 2: The first job I had was at a family owned

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Speaker 2: media company outside of in the West suburbs of.

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Speaker 1: The Wall Street Journal is part of the family army.

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Speaker 2: I fought my way back.

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Speaker 1: So where did you what was the first place?

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Speaker 2: It was called Wednesday Journal, and they ran a bunch

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Speaker 2: of weekly newspapers and a monthly parenting magazine called Chicago Parent.

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Speaker 2: That was my truly my first job was running their

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Speaker 2: web editor. I mean it was grim times and nine.

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Speaker 1: How did you get to the Journal?

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Speaker 2: I moved to New York in twenty ten working for

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Speaker 2: a legal trade pub, a competitor of Bloomberg Law Law

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Speaker 2: three sixty, where I was hired. You know, your career

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Speaker 2: is just a series of lucky breaks. I was hired

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Speaker 2: to cover I think securities litigation or insurance regulation some

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Speaker 2: of you like truly, and then my recollection. Anyway, this

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Speaker 2: is the myth that I'm going to create. Was that

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Speaker 2: my first day they said, actually, we're thinking about launching

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Speaker 2: a corporate law vertical. Do you want to cover M

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Speaker 2: and A? And I said, I don't know what that is,

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Speaker 2: but yes, that sounds better.

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Speaker 1: I'm familiar with them, but A is exactly right.

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Speaker 2: No idea. But you know, working at a trade pub

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Speaker 2: is such a great training ground, right because you've got

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Speaker 2: to get really smart fast, and you have to know

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Speaker 2: what you don't know and find out you know because

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Speaker 2: your the rears are incredibly sophisticated. So anyway, I covered

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Speaker 2: M and A for them for about two years and

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Speaker 2: then I don't know what God smiled on me, but

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Speaker 2: I got hired by the Wall Street Journal in twenty thirteen.

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Speaker 1: So you start in twenty thirteen, and then you proceed

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Speaker 1: to get some major news stories that you either covered

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Speaker 1: intimately or broke. Burger King buys Tim Horton's Bakery using Halliburton,

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Speaker 1: merge Delany's EMC. What stands out from that era and

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Speaker 1: what was your lucky break that you were very often

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Speaker 1: amongst the first reporters breaking this news.

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Speaker 2: Well, the journal is an incredible seat from which to

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Speaker 2: do that. There's a lot of institutional privilege that you

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Speaker 2: bring to the job every day there. You know, when

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Speaker 2: I got hired in twenty thirteen, Emina was dead. Part

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Speaker 2: of the reason, actually, I think that I got hired

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Speaker 2: was that I was covering kind of messy, wonky legally

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Speaker 2: complicated em andated had gone sideways. You know, it ended

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Speaker 2: up in court, and that was at the time with

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Speaker 2: the journal thought was a blind spot for them, which

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Speaker 2: they were very good at breaking deals, but didn't totally

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Speaker 2: understand them or lost sight of them after they came out.

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Speaker 2: And then you know, as it turns out, a switch

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Speaker 2: flipped in the market. In twenty fourteen was a record,

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Speaker 2: twenty fifteen was a record. None of them still stand right,

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Speaker 2: They've been eclipsed by sixteen seventeen and then you know

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Speaker 2: again in twenty one, but you know, it was there

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Speaker 2: were big deals falling out of the sky, and I

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Speaker 2: don't know. I always say it's better to be lucky

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Speaker 2: than good, though, if you can be both, that's that's helpful.

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Speaker 2: But yeah, some of those were fun. Burger king Tim

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Speaker 2: Horton's I remember very clearly, because it was in the

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Speaker 2: middle of those waves of kind of tax dodgy, those

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Speaker 2: inversion deals.

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Speaker 1: But these are two big, legitimate, you know.

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Speaker 2: Totally, but they were reincorporating in Canada and there was

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Speaker 2: a lot of sensitivity around that, and I remember that

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Speaker 2: one came together pretty quick, if I remember, which is

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Speaker 2: pretty unusual, but like Friday or Thursday to a Sunday scoop.

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Speaker 1: So what about the COVID beat? How did you find

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Speaker 1: your way to that space? Were you regularly covering epidemics

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Speaker 1: or clearly there's a corporate story there. How did you

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Speaker 1: tumble your way into that?

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Speaker 2: You know, go back to early twenty twenty, I mean

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Speaker 2: every beat was a COVID beat pretty quickly too. Right

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Speaker 2: at that point, I'd been covering, as you mentioned, investment

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Speaker 2: banking Goldman Sachs for a couple of years and again,

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Speaker 2: I'm probably pretty lucky. I had the sense at the

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Speaker 2: time that maybe that story was at least that chapter

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Speaker 2: of it was a bit played out. You know, that

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Speaker 2: February March market started to go. I mean it started

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Speaker 2: as a financial story, I guess is the how I

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Speaker 2: got involved, which is that markets woke up to it

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Speaker 2: very quickly, and things got hairy very fast, and basically

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Speaker 2: every reporter at the Wall Street Journal at the time

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Speaker 2: was became a COVID reporter.

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Speaker 1: That's interesting. So when did you get a sense that, hey,

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Speaker 1: this COVID thing isn't just another flu. There's something an

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Speaker 1: order of magnitude more significant than what's usually your background story.

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Speaker 1: Forty thousand people die from the flu every year in

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Speaker 1: the US. Anyway, when what was it clear to you

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Speaker 1: as a reporter this wasn't the usual flu.

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Speaker 2: I won't say that it was ever clear to me

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Speaker 2: from the health perspective. I'm not a health expert, but

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Speaker 2: you know, you.

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Speaker 1: Would see these heads even from a business perspective, right, So.

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Speaker 2: I think really what happened was and I tried We'll

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Speaker 2: talk about the book in a bit, but I tried

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Speaker 2: to kind of recreate that that slowly and then all

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Speaker 2: at once feeling right if you remember, you know a esque. Yeah,

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Speaker 2: but you know, markets peaked, you know, would turn out

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Speaker 2: to be a peak on I think February eighteenth or nineteenth. Right,

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Speaker 2: things are, you're starting to see it a little bit

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Speaker 2: in the repo market, You're starting to see commercial paper

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Speaker 2: credit get a little rickety, spreads are widening, stocks are

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Speaker 2: still kind of hanging on. And then it was really,

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Speaker 2: you know, the last couple of days of February and

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Speaker 2: the first week of March where I mean, things just

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Speaker 2: went crazy. And I remember, you know, to give you

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Speaker 2: a sense of you know, the fact that I'm trying

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Speaker 2: not to Monday morning quarterback this stuff. I was coming

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Speaker 2: back from a family vacation on March eighth in the

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Speaker 2: in the Gulf and sitting there not a mask in site.

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Speaker 2: I remember my sister in law had stolen some extra

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Speaker 2: wet naps from Chick fil A, like wiping down the

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Speaker 2: airline seat, feeling a little foolish doing it. And so

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Speaker 2: came back to the office on a Monday Wednesday. We

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Speaker 2: were told, you know what, we're gonna try and work

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Speaker 2: from home on Thursday. This is Thursday, March twelfth. Uh huh,

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Speaker 2: never went back.

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Speaker 1: Wow, that's unbelievable.

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Speaker 2: So I mean, that's how quickly this happened.

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Speaker 1: I have a vivid recollection of my sister lives in

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Speaker 1: the city. I live in the Burbs, and she was

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Speaker 1: out visiting late February and we had gone to Target. Hey,

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Speaker 1: as long as you're out here, let's swing by Target.

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Speaker 1: And I never really go to Target post pandemic. It's

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Speaker 1: all delivered. But at the time we were walking through Target,

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Speaker 1: there's no toilet paper, there's no bleach, there's no this

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Speaker 1: is February, this isn't March. And that was my first, Hey,

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Speaker 1: something's going on. But it turns out in the book

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Speaker 1: lots of companies had a much earlier sort of lead

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Speaker 1: on something bad, something wicked. This way comes and it's

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Speaker 1: not the usual. Tell us a little bit about that,

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Speaker 1: you know.

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Speaker 2: I start the book kind of an earnest at Davos

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Speaker 2: twenty twenty, which will to me just go down as

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Speaker 2: like the most absurd gathering of human beings right in history.

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Speaker 2: And you know, it's this private dinner that's actually being

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Speaker 2: hosted by my ven employer at Wall Street Journal, though

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Speaker 2: I was not invited. They don't let the reporters into

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Speaker 2: the fun stuff. But it's a bunch of CEOs with

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Speaker 2: Steven Manuchin, the Treasury Secretary, and they're all yacking about this.

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Speaker 2: The big theme that year, as it often has been

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Speaker 2: since then, was environment esg and they're all talking about

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Speaker 2: the kind of corporate babble that you hear at these things.

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Speaker 2: And Steven Manuchin, the Treasury Secretary, stands up and says, you, guys,

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Speaker 2: like you're looking at the wrong thing. There is a

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Speaker 2: city of eleven million people in China that's on lockdown.

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Speaker 2: This is the end of January of twenty twenty. And

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Speaker 2: I start there because you know, in my reporting, these

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Speaker 2: are people who should have had they the best line

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Speaker 2: citing the world. They run global businesses, they've got regulators

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Speaker 2: and government officials on speed dial. They sometimes are regulators

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Speaker 2: and government officials, and they were totally blindsided. And you know,

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Speaker 2: there's two ways to look at that. One as like celebrities,

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Speaker 2: they're just like us, right, like these guys bumped along

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Speaker 2: in the dark, just like the rest of us. The

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Speaker 2: other is, I don't know, I found it a little unsettling.

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Speaker 2: These are people who really should be able to see

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Speaker 2: around corners. They're paid a lot of money to see

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Speaker 2: around corners, and most of them didn't.

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Speaker 1: Most of them didn't, but a few did. And I'm

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Speaker 1: fascinated in the book, and we'll get into the details

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Speaker 1: how some companies in different sectors they were able to

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Speaker 1: see a little bit around corners. Starting with the airlines,

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Speaker 1: they were getting cancelations long before everybody shut down. They

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Speaker 1: had a sense, hey, something is a little different here.

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Speaker 1: You talk about hotels, Airbnb, and then the banks were

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Speaker 1: having people draw down their line of credit weeks and

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Speaker 1: weeks before things really got got bit. So that's the question,

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Speaker 1: who had the earliest read, who was hip as to

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Speaker 1: what was going on? And what was their response.

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Speaker 2: In my reporting, Actually, someone you didn't mention I think

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Speaker 2: had the earliest beedn That was Bill Ackman.

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Speaker 1: That literally next question of Persian Square Capital. Yeah, who

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Speaker 1: got very nervous very early. Yeah.

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Speaker 2: So Bill a bit of a germophobe, but he you know,

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Speaker 2: in mid February, he has been reading. He's a voracious

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Speaker 2: consumer of everything's kind of funnel to him and internalizes

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Speaker 2: it in these investment vcs, and he is starting to

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Speaker 2: get very spooked. In late January, mid February, he goes

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Speaker 2: to London School of Economics in mid February, gives this

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Speaker 2: talk and is asked about the coronavirus, and as he's

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Speaker 2: sort of getting ready to answer, this kid in the

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Speaker 2: front row just like very innocently coughs or something and

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Speaker 2: Bill kind of like leaves, yeah, jumps and it's one

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Speaker 2: of those like dumb little things that we would all

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Speaker 2: kind of you know, later you would look back and

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Speaker 2: be like, oh, that's what did it for me? And

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Speaker 2: he comes back and says, Okay, I think we are

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Speaker 2: dramatically underestimating this. And so the key components of any

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Speaker 2: investment are like fesis, expression and timing right, and so

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Speaker 2: he says, I think the market is not aware of

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Speaker 2: the risks here. Okay, how do I express it? And

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Speaker 2: most people think of Bill his bread and butter business,

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Speaker 2: as activist concentrated stock investing, but he's a bit of

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Speaker 2: a background in macro two back from seven oh eight,

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Speaker 2: and he actually decides to do this in the credit markets,

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Speaker 2: where spreads are incredibly tight, investors are assigning basically no

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Speaker 2: risk premiums to corporates at were governments or junk over

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Speaker 2: investment grade. And he said, all right, we when things

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Speaker 2: get bad, that's where it's going to blow out, and

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Speaker 2: he shorts the entire credit market. And it only takes

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Speaker 2: about two and a half weeks for people to realize

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Speaker 2: that he is right and he's holding an incredibly valuable

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Speaker 2: piece of paper. Ends up turning about twenty seven million

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Speaker 2: dollars of SWAT premiums into two billion plus and profit.

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Speaker 1: I really like the way you tell this tale from

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Speaker 1: multiple perspectives, multiple storyline, lots of different leading characters. What

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Speaker 1: led to that approach?

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Speaker 2: I mean, at heart, I'm a narrative journalist. I like

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Speaker 2: to tell stories and collect facts and present them in

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Speaker 2: ways that people can understand and grab onto. But really

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Speaker 2: the origin story of the book was I had done

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Speaker 2: a story for the Wall Street Journal that published the

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Speaker 2: first Saturday in April, and it was a TikTok day

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Speaker 2: by day of the month of March, and it feeds

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Speaker 2: from you know, lots of colleagues around the newsroom, and

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Speaker 2: it was day by day from the seat of it

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Speaker 2: was the month that the economy shut down. We've never

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Speaker 2: seen it before. We thought that was an important story

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Speaker 2: to tell, and it's you know, two dozen CEOs, investors,

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Speaker 2: policymakers from like all across the economy, and it was

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Speaker 2: just incredibly clear coming out of that that that we

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Speaker 2: just barely scratched the surface, right, that this was fundamentally

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Speaker 2: just like the kind of yarn that reporters dream of,

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Speaker 2: which is it's narrative, it's tense, there's a lot of drama,

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Speaker 2: there's high stakes. Things really mattered, and so that's I

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Speaker 2: think where the germ sort of I've got planted. I

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Speaker 2: spent a couple of weeks, you know, talking to you know,

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Speaker 2: publishers and agents as one does, and try to write

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Speaker 2: a proposal and see if anyone would buy it. And

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Speaker 2: then they did. And next thing I knew it was

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Speaker 2: you know, summer fall of twenty twenty and I was

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Speaker 2: at a book deal.

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Speaker 1: Huh. Really really interesting. So so you choose a number

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Speaker 1: of specific industries or did you choose them? Did they

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Speaker 1: self selected? It's kind of apparent some of these industries

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Speaker 1: are going to be the first to really succumb to

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Speaker 1: an economy shutting down. How did you decide who were

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Speaker 1: the key players to focus on, what sectors to really

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Speaker 1: delve into.

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Speaker 2: Yeah, this is you know, most reporters who write a book,

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Speaker 2: they have a beat and a huge thing happens on

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Speaker 2: their beat and they crush it, and then they write

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Speaker 2: a book about it, right, think about.

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Speaker 1: Whatever your bad blood is bad blood.

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Speaker 2: Perfect example, John carry Rout at the Journal crushes the

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Speaker 2: there are no story and says, of course I should

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Speaker 2: write a book. This was a little different, right, This

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Speaker 2: is nobody's beat at the Journal. Elsewhere is every company

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Speaker 2: on the planet, in the entire economy. So and in part,

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Speaker 2: I think the reas that I thought I was maybe

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Speaker 2: in a good position to do it was I thought

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Speaker 2: it would be more of a financial story. If you

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Speaker 2: remember early on, right, the markets are going crazy. There's

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Speaker 2: you know, people are always kind of solving the next

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Speaker 2: crisis by looking at the last one, and there's this

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Speaker 2: concern that it's going to be two thousand and eight

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Speaker 2: all over again. And I thought the banks would be

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Speaker 2: aniger piece of it, honestly. Then they it turned out

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Speaker 2: really to be a story about a crisis in the

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Speaker 2: real economy. So then you know that summer you're looking around,

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Speaker 2: you're thinking, okay, like some combination of what is important.

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Speaker 2: So some obvious ones there. Airlines obviously important, right, travel

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Speaker 2: obviously important, finance important. It was just a little unclear

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Speaker 2: then how that would all shake out. I know I

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Speaker 2: wanted a big sort of multinational industrial manufacturer, manufacturers, yahure,

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Speaker 2: and I wanted people ask me, why is Airbnb in

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Speaker 2: the book if you have Hilton, and did you want

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Speaker 2: a tech company? And the truth is, at that point

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Speaker 2: I really didn't think, and I think it ultimately was

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Speaker 2: the right call. I'm not sure that tech had a

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Speaker 2: uniquely interesting pandemic. No, despite the reason that we kind

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Speaker 2: of all got through it. I'm not sure Apple had

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Speaker 2: like an incredibly compelling story.

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Speaker 1: Right, if anything of any sector that was able to

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Speaker 1: sort of all right, everybody go work from home. You

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Speaker 1: all have laptops and high speed connections. Do you have

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Speaker 1: to do? They seem to almost take it in stride.

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Speaker 2: Tech was the scaffolding on which the pandemic story hung,

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Speaker 2: I think, but not to me anyway at the time,

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Speaker 2: an important part of it. But I did want a

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Speaker 2: company that was in addition to kind of making sure

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Speaker 2: that you're checking boxes on sectors and really getting a picture.

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Speaker 2: At the end of the day, books are character driven

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Speaker 2: these kind anyway, and so you're gonna end up sort

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Speaker 2: of essentializing these CEOs into archetypes that are carrying a

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Speaker 2: narrative that's sort of you know, buzzing underneath feed the

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Speaker 2: story that they're telling.

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Speaker 1: And I will have a lot of great characters as

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Speaker 1: CEOs and great storylines. David Solomon at Goldman you have

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Speaker 1: the CEO of Hilton Delta American Airlines, like work your

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Speaker 1: n Airbnb, Brian Tranchesky.

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Speaker 2: If I wanted a CEO who was younger, I wanted

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Speaker 2: a company that was in a different place in their

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Speaker 2: life cycle, and Rbnb was on the verge of going public,

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Speaker 2: which is just such a naturally high stakes thing. And

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Speaker 2: you know, we can talk about the Airbnb story, but

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Speaker 2: I fully thought they were left for dead, which is

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Speaker 2: why I'm a journalist and not an investor.

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Speaker 1: So when you're selecting these storylines, when you're choosing these characters,

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Speaker 1: how obvious are some of these because these are all

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Speaker 1: big personalities, big egos. There's no shrinking violets amongst any

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Speaker 1: of the people you're writing about. Was that part of

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Speaker 1: the reason you selected them? Tell us a little bit

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Speaker 1: about the thought process.

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Speaker 2: You know, you never know why some I mean this

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Speaker 2: is true at a daily journalism job or a book

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Speaker 2: you never really know why anyone is talking to you,

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Speaker 2: and you know again, because of the way this book

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Speaker 2: came together, I had to kind of go out and say,

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Speaker 2: here's what I'm trying to do. I think you have

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Speaker 2: a good story to tell. By the way that you

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Speaker 2: shouldn't assume that any of the people in the book

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Speaker 2: spoke to me. Their stories are the ones that I tell.

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Speaker 2: But it's a little bit of a kind of layer,

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Speaker 2: all right, like one of the important stories where can

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Speaker 2: I get people to talk to me? And then you

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Speaker 2: kind of throw things overboard where like one or both

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Speaker 2: of those isn't quite working.

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Speaker 1: So I have to interrupt you here. I assumed you

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Speaker 1: spoke to all of these people. It looks like you

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Speaker 1: have amazing access people. There's a lot of details that

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Speaker 1: are very very specific that someone would say, and it

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Speaker 1: keeps coming up to food. Oh, they're out in mon

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Speaker 1: talk and they have a lobster role. Or he's stuck

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Speaker 1: in a hotel and he's eating the same sort of

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Speaker 1: food that comes in every day because it's him and

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Speaker 1: a bunch of Saudi's stuck in a DC hotel, those

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Speaker 1: sort of things. It looks like these are very specific

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Speaker 1: recollections from individuals who appear to have spoken to you.

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Speaker 2: Yeah. Look, I mean I think readers can draw their

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Speaker 2: own conclusions. I think what I had said when I

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Speaker 2: approach people was, you know, here's how I want to

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Speaker 2: tell this story, which is very voice of God, very

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Speaker 2: fly on the wall. I think, just from a reader,

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Speaker 2: that's really what you want. You want to be jumping

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Speaker 2: back and forth between live quotes and old things, and

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Speaker 2: you're trying to tell a story. And I think that

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Speaker 2: gives people the safest space to speak.

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Speaker 1: But you did speak to most of these people.

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Speaker 2: I certainly everyone in the book had ample opportunity to

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Speaker 2: talk to me, and many of them took it.

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Speaker 1: Oh that makes a lot, makes a lot of sense.

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Speaker 1: Were there any narratives that you want to cover but

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Speaker 1: didn't like, Any companies or sectors or space that you thought, oh,

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Speaker 1: this could be a great thread and for whatever reason,

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Speaker 1: it never came together.

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Speaker 2: Yeah, there's two buckets of those. I would say, like

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Speaker 2: you will notice and like, I think it's better to

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Speaker 2: just address it straight on. There's not a cruise company

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Speaker 2: in the book. There's not a meat packing there's not

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Speaker 2: like a what we would consider to be like bad

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Speaker 2: or at least slightly dubious actors. You at a shock,

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Speaker 2: and like, look, I never covered those industries, and a

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Speaker 2: challenge of a project like this is you just you

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Speaker 2: can't source up at twenty places in six months. It's

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Speaker 2: not how journalism works. Took me years to get the

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Speaker 2: relationships that I have now. And so yeah, there is

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Speaker 2: a little bit of self selection there, which is like

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Speaker 2: total fair criticism of the project if you're making one.

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Speaker 2: And then there were some that I pursued that ultimately

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Speaker 2: just I didn't think we're additive. So Macy's is a

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Speaker 2: good example, kind of thought they would have a more

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Speaker 2: interesting pandemic than they did. I got to the end

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Speaker 2: and we sort of my editor and I kind of

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Speaker 2: looked at the storylines, like what are we doing here?

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Speaker 2: And we threw one or two overboard.

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Speaker 1: Retail just is nothing. Hey, there's no retail order online.

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Speaker 2: You know what it was? Honestly, it was yes, And

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Speaker 2: I think that story is going to take a couple

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Speaker 2: of years to play out, and I don't I couldn't

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Speaker 2: say at the time. And that's a hard thing about

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Speaker 2: writing a book, particularly when you come from the world

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Speaker 2: of journalism, particularly if you come from a place like

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Speaker 2: the Wall Street Journal, which is that you're supposed to

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Speaker 2: have a point of view on this stuff, and you're

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Speaker 2: supposed to be able to say something definitive. And it

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Speaker 2: felt too early to me at the time. Yeah, it

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Speaker 2: felt too squishy.

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Speaker 1: Huh. Really interesting. So let's talk a little bit about

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Speaker 1: Bill Ackman. He not only was early in seeing the crisis,

434
00:20:53,760 --> 00:20:57,240
Speaker 1: but that bet he made ended up netting Pershing square

435
00:20:57,800 --> 00:21:00,879
Speaker 1: two billion dollars. That's a hell of a trade. I

436
00:21:00,880 --> 00:21:02,760
Speaker 1: don't know why we haven't heard more about that.

437
00:21:03,160 --> 00:21:05,400
Speaker 2: Look, say what you want about Bill. I mean he's

438
00:21:05,440 --> 00:21:08,120
Speaker 2: a controversial figure and he doesn't always get it right,

439
00:21:08,160 --> 00:21:10,320
Speaker 2: and that is one of the best trades of all time. Yeah,

440
00:21:10,359 --> 00:21:13,680
Speaker 2: that's great, and you know it's it's a pure trade.

441
00:21:13,720 --> 00:21:16,439
Speaker 2: He saw something that people didn't. He was right on

442
00:21:16,480 --> 00:21:20,680
Speaker 2: the thesis. He found a place to express it efficiently, right,

443
00:21:21,000 --> 00:21:23,040
Speaker 2: I mean absolutely nailed the time. I mean you're talking

444
00:21:23,080 --> 00:21:24,719
Speaker 2: about I don't like you could do the math. It's

445
00:21:24,760 --> 00:21:27,000
Speaker 2: got ten thousand percent return in like three weeks. I

446
00:21:27,000 --> 00:21:27,760
Speaker 2: mean it's I mean.

447
00:21:28,119 --> 00:21:31,119
Speaker 1: Really crazy well number. So I love that he reaches

448
00:21:31,160 --> 00:21:34,080
Speaker 1: out to different people like Warren Buffin and Bill Gates.

449
00:21:34,440 --> 00:21:36,399
Speaker 1: Anybody ever get back to him, I don't think so.

450
00:21:36,680 --> 00:21:38,199
Speaker 2: I mean that's The other thing about Bill, which is,

451
00:21:38,520 --> 00:21:42,560
Speaker 2: you know, I can say straight face, like, very impressive

452
00:21:42,800 --> 00:21:46,439
Speaker 2: piece of financial footwork there, but also is a little

453
00:21:46,640 --> 00:21:48,959
Speaker 2: is flailing a little bit, is a little vulnerable is

454
00:21:49,240 --> 00:21:51,720
Speaker 2: you know? The thing about Bill Lackman, and I write

455
00:21:51,720 --> 00:21:53,560
Speaker 2: about this in the book, is he has this tendency

456
00:21:54,040 --> 00:21:56,720
Speaker 2: to take what our investment thesis and turn them into

457
00:21:56,720 --> 00:21:59,720
Speaker 2: holy wars. You'll remember years ago he had a proxy

458
00:21:59,720 --> 00:22:02,080
Speaker 2: fight it Target and I think it was invoking JFK

459
00:22:02,320 --> 00:22:03,800
Speaker 2: and his speech to shareholders.

460
00:22:03,640 --> 00:22:07,680
Speaker 1: It's really target at least the battle with Carl Icon

461
00:22:07,920 --> 00:22:11,919
Speaker 1: over what he describes as a pyramid scheme. You could

462
00:22:11,960 --> 00:22:12,640
Speaker 1: say that's.

463
00:22:12,480 --> 00:22:14,280
Speaker 2: A whole but also even that, you know, tears in

464
00:22:14,280 --> 00:22:16,120
Speaker 2: his eyes talking about taking the battle to the ends

465
00:22:16,119 --> 00:22:18,159
Speaker 2: of the earth like it and you know what, they

466
00:22:18,200 --> 00:22:21,480
Speaker 2: are genuinely felt. These are peces that become He wraps

467
00:22:21,520 --> 00:22:23,520
Speaker 2: himself in the flag of them, and he totally did

468
00:22:23,560 --> 00:22:26,000
Speaker 2: it here, right. He takes to Twitter for the first

469
00:22:26,040 --> 00:22:28,720
Speaker 2: time in you know, year or two and says, mister President,

470
00:22:28,840 --> 00:22:31,040
Speaker 2: like we can solve this right in jets himself right

471
00:22:31,080 --> 00:22:33,600
Speaker 2: in the middle of this thing. Ends up parlaying that

472
00:22:33,720 --> 00:22:37,159
Speaker 2: into a CNBC interview where he.

473
00:22:37,440 --> 00:22:40,840
Speaker 1: Rarely excortiated for even though he had already covered his

474
00:22:40,920 --> 00:22:42,280
Speaker 1: short and moved to.

475
00:22:42,240 --> 00:22:44,880
Speaker 2: The long side exactly right now. In fairness, live television

476
00:22:44,920 --> 00:22:47,159
Speaker 2: is not a place that is super comfortable with a

477
00:22:47,240 --> 00:22:49,320
Speaker 2: lot of nuance, right. But what he did was he

478
00:22:49,359 --> 00:22:52,119
Speaker 2: went on television and said hell is coming, and and

479
00:22:52,160 --> 00:22:54,480
Speaker 2: the stock market went down. And I think Mike Novagrats

480
00:22:54,560 --> 00:22:56,240
Speaker 2: was like, get him off the air, right, I mean

481
00:22:56,240 --> 00:22:58,879
Speaker 2: it was, but you're right, he I think ultimately, and

482
00:22:58,920 --> 00:23:01,040
Speaker 2: I spent a lot of time on this because I

483
00:23:01,080 --> 00:23:03,359
Speaker 2: didn't want to carry anyone's water. He didn't do anything wrong.

484
00:23:03,800 --> 00:23:05,560
Speaker 1: Yeah, No, he really was fascinating.

485
00:23:05,640 --> 00:23:06,520
Speaker 2: He was bullish at that point.

486
00:23:06,800 --> 00:23:10,200
Speaker 1: Yeah, he had pocketed the two billion and said we're

487
00:23:10,240 --> 00:23:12,600
Speaker 1: going to go the other way because I think eventually

488
00:23:13,119 --> 00:23:16,640
Speaker 1: the Fed and the White House will do the right

489
00:23:16,680 --> 00:23:17,080
Speaker 1: thing here.

490
00:23:17,200 --> 00:23:19,399
Speaker 2: Yes, And that's the way he thinks, right. The answer

491
00:23:19,440 --> 00:23:21,919
Speaker 2: to him was so obvious that someone was going to

492
00:23:22,160 --> 00:23:26,159
Speaker 2: do it and rborway the trade that he saw, you know, so.

493
00:23:26,560 --> 00:23:29,720
Speaker 1: He covers the short, goes long, and yet there's a

494
00:23:29,760 --> 00:23:33,040
Speaker 1: ton of criticism that he's talking down the market because

495
00:23:33,080 --> 00:23:35,439
Speaker 1: he's short. He was no longer short.

496
00:23:35,640 --> 00:23:37,240
Speaker 2: Yeah, he just wasn't that's just not true.

497
00:23:37,600 --> 00:23:40,720
Speaker 1: So in the book and my recollection of the period

498
00:23:40,880 --> 00:23:44,600
Speaker 1: is the criticism seemed to be not just unfair but

499
00:23:44,960 --> 00:23:49,199
Speaker 1: very personal. How did he respond to the sort of

500
00:23:49,320 --> 00:23:51,760
Speaker 1: public flaying that he got on Twitter?

501
00:23:52,440 --> 00:23:55,640
Speaker 2: Actually responded pretty responsibly, put out I think two shareholder

502
00:23:55,680 --> 00:23:57,800
Speaker 2: letters about a week apart in late March, and actually

503
00:23:57,840 --> 00:24:00,440
Speaker 2: like did what no portfolio manager usually love doing, which

504
00:24:00,480 --> 00:24:03,200
Speaker 2: is he deconstructed the trade. Right, he said, here's what

505
00:24:03,320 --> 00:24:05,200
Speaker 2: we bought, here's what we bought, here's what we paid.

506
00:24:05,520 --> 00:24:07,919
Speaker 2: Here was my positioning more or less. When I went

507
00:24:07,960 --> 00:24:10,000
Speaker 2: on the air, I thought handled it the right weight.

508
00:24:10,080 --> 00:24:11,760
Speaker 2: Got a little loss in all the noise, and sure,

509
00:24:11,840 --> 00:24:12,160
Speaker 2: you know.

510
00:24:12,280 --> 00:24:14,120
Speaker 1: I mean, at that point, the world is going to hell,

511
00:24:14,160 --> 00:24:16,840
Speaker 1: and who cares about a letter from a hedge fund

512
00:24:16,920 --> 00:24:20,400
Speaker 1: manager explaining why he wasn't joy boning the market down?

513
00:24:20,760 --> 00:24:23,720
Speaker 1: But still a great trade that he never really got

514
00:24:23,760 --> 00:24:27,120
Speaker 1: full credit for, other than the two and twenty, which

515
00:24:27,160 --> 00:24:28,120
Speaker 1: is not a terrible thing.

516
00:24:28,119 --> 00:24:29,800
Speaker 2: And and you know most of the money is his though,

517
00:24:30,040 --> 00:24:32,480
Speaker 2: yeah he's any anymore.

518
00:24:32,720 --> 00:24:34,879
Speaker 1: Right, right? That happens with a lot of hedge funds.

519
00:24:34,920 --> 00:24:38,639
Speaker 1: And so even better than the twenty is the two billion.

520
00:24:38,960 --> 00:24:42,160
Speaker 1: It's not a bad, bad week's work or bad months work. Right.

521
00:24:42,280 --> 00:24:43,840
Speaker 2: The other thing about Bill, I don't know if you

522
00:24:43,840 --> 00:24:44,320
Speaker 2: want to get to this.

523
00:24:44,359 --> 00:24:46,399
Speaker 1: Leep, yeah, no, I love tell more, tell.

524
00:24:46,280 --> 00:24:49,359
Speaker 2: Me you know. He called this thing coming and going right.

525
00:24:49,400 --> 00:24:52,440
Speaker 2: We talked about the coming on the way out back

526
00:24:52,480 --> 00:24:57,280
Speaker 2: before inflation was was really a thing. He does what

527
00:24:57,320 --> 00:25:00,560
Speaker 2: any sort of freshman economic student could do, says, I

528
00:25:00,560 --> 00:25:02,400
Speaker 2: don't know, man, like a lot of pen up demand here,

529
00:25:02,720 --> 00:25:05,679
Speaker 2: a lot of money most people buy and large and

530
00:25:05,720 --> 00:25:07,439
Speaker 2: this is true at kind of every income level. Came

531
00:25:07,480 --> 00:25:09,880
Speaker 2: out of the pandemic wellfare, then they went into it

532
00:25:10,400 --> 00:25:15,680
Speaker 2: and just a total show on the supply side. We're

533
00:25:15,680 --> 00:25:17,440
Speaker 2: going to have massive inflation here. And he put on

534
00:25:17,480 --> 00:25:18,960
Speaker 2: a train. He was a little earlier on that one.

535
00:25:19,000 --> 00:25:22,240
Speaker 2: His actual IRR is not quite as good, but heils

536
00:25:22,240 --> 00:25:23,359
Speaker 2: like another two billion dollarge.

537
00:25:23,840 --> 00:25:26,040
Speaker 1: There really weren't a lot of people who were who

538
00:25:26,040 --> 00:25:29,359
Speaker 1: were correct about that. Jeremy Siegel was one for the

539
00:25:29,359 --> 00:25:32,160
Speaker 1: same reasons, and and Ackman was one.

540
00:25:32,200 --> 00:25:34,680
Speaker 2: So kudos called it coming and going I will note

541
00:25:34,720 --> 00:25:36,359
Speaker 2: that when he went back to doing what he is

542
00:25:36,400 --> 00:25:39,520
Speaker 2: ostensibly paid to do, which is to take deeply researched

543
00:25:39,560 --> 00:25:41,840
Speaker 2: positions in single name stocks. He lost a ton of

544
00:25:41,840 --> 00:25:42,920
Speaker 2: money on Netflix, so.

545
00:25:43,920 --> 00:25:46,520
Speaker 1: Which is which is kind of funny because did he

546
00:25:46,680 --> 00:25:48,080
Speaker 1: lose it on the way up and did he lose

547
00:25:48,119 --> 00:25:48,800
Speaker 1: it on the way down?

548
00:25:49,280 --> 00:25:51,080
Speaker 2: You know, I'd have to go back and look. My

549
00:25:51,119 --> 00:25:53,679
Speaker 2: recollection is that he came out publicly not an activist position.

550
00:25:53,760 --> 00:25:55,800
Speaker 2: So we think this is a great company and literally

551
00:25:55,800 --> 00:25:58,600
Speaker 2: did it right at like peak streaming, Like the next

552
00:25:58,640 --> 00:26:02,359
Speaker 2: quarter Netflix announce it's like first subscriber either slowing growth

553
00:26:02,400 --> 00:26:04,720
Speaker 2: or loss, I don't remember, uh, and sort of kicked

554
00:26:04,720 --> 00:26:07,879
Speaker 2: off this now two year kind of slow bleed of peak.

555
00:26:07,600 --> 00:26:10,240
Speaker 1: Streaming happens, Hey happens. You can't You can't bat a

556
00:26:10,280 --> 00:26:13,600
Speaker 1: thousand in this business, right, You make two billion dollars

557
00:26:13,680 --> 00:26:16,560
Speaker 1: on the pandemic, you make two billion dollars on the

558
00:26:16,560 --> 00:26:17,920
Speaker 1: inflation call at.

559
00:26:17,800 --> 00:26:20,160
Speaker 2: A cost of about two hundred million if I remember right, right.

560
00:26:20,560 --> 00:26:22,600
Speaker 1: And so then you lose a couple of bucks on Netflix.

561
00:26:23,320 --> 00:26:27,480
Speaker 1: You know this too shall pass? Yes, So wh let's

562
00:26:27,520 --> 00:26:30,159
Speaker 1: talk a little bit about Yolo. You only live once.

563
00:26:30,640 --> 00:26:33,840
Speaker 1: That means go out and buy the crappiest meme based

564
00:26:33,960 --> 00:26:37,320
Speaker 1: companies there are discuss.

565
00:26:37,600 --> 00:26:40,520
Speaker 2: I mean no, it's it's such an important part of

566
00:26:40,520 --> 00:26:42,159
Speaker 2: the pandemic story because I think, I mean, it's just

567
00:26:42,200 --> 00:26:45,320
Speaker 2: so fueled by it, right, like all of the very

568
00:26:45,359 --> 00:26:48,320
Speaker 2: normal human behaviors came to an end, and there's that

569
00:26:48,560 --> 00:26:50,680
Speaker 2: a a lot of money. As we've discussed, these these

570
00:26:50,640 --> 00:26:54,159
Speaker 2: Stimmius stimulus checks and just this like you can't go

571
00:26:54,200 --> 00:26:55,480
Speaker 2: to sports game bat.

572
00:26:55,400 --> 00:26:58,240
Speaker 1: On sports, no betting, no casino.

573
00:26:58,880 --> 00:27:02,160
Speaker 2: Stock market becomes a casino like most you know, stock

574
00:27:02,240 --> 00:27:05,600
Speaker 2: markets are largely momentum driven, which is weird if you

575
00:27:05,600 --> 00:27:07,680
Speaker 2: think about it, right, Like a stock goes up, it's

576
00:27:07,720 --> 00:27:10,360
Speaker 2: presumably a little more overvalued than it was before it did.

577
00:27:10,440 --> 00:27:12,440
Speaker 2: You should sell it, right, say, if it goes down,

578
00:27:12,440 --> 00:27:15,280
Speaker 2: and instead you end up having these waves that fuel

579
00:27:15,359 --> 00:27:19,720
Speaker 2: themselves and you know, your professional wealth manager, you chuck

580
00:27:19,720 --> 00:27:22,399
Speaker 2: to investors, they will say that underpinning it is some

581
00:27:22,480 --> 00:27:25,919
Speaker 2: basic fundamentals of you know, corporate analysis and management. Not

582
00:27:26,040 --> 00:27:29,440
Speaker 2: really and actually the meme stock stuff just didn't even pretend, right,

583
00:27:29,760 --> 00:27:33,479
Speaker 2: it was so nakedly goofy. And as you know, Spencer

584
00:27:33,480 --> 00:27:36,440
Speaker 2: wrote this great book. Certainly some people made some money,

585
00:27:36,440 --> 00:27:40,600
Speaker 2: but like ultimately a giant cell phone by that entire community, right.

586
00:27:40,880 --> 00:27:44,040
Speaker 1: Right, no doubt about it. And it all started with

587
00:27:44,680 --> 00:27:48,440
Speaker 1: game Stop and read it and Wall Street bets and

588
00:27:48,520 --> 00:27:52,600
Speaker 1: that became like a self fulfilling prophecy of a small

589
00:27:52,640 --> 00:27:56,600
Speaker 1: company with a huge excess short position in it, which

590
00:27:56,640 --> 00:27:59,760
Speaker 1: meant it was primed for a squeeze. And then these

591
00:28:00,040 --> 00:28:03,520
Speaker 1: people discovered Gamma trades. Hey, we can buy out of

592
00:28:03,560 --> 00:28:07,200
Speaker 1: the money call options and force these people to cover

593
00:28:07,280 --> 00:28:11,040
Speaker 1: their shorts and you know, to take a let's be honest,

594
00:28:11,080 --> 00:28:15,120
Speaker 1: it's a junk company, right. Wait, you're selling video games

595
00:28:15,280 --> 00:28:20,680
Speaker 1: in retail shops in malls. Who cares to take that

596
00:28:20,720 --> 00:28:24,960
Speaker 1: from single digits to multi triple digits. That's a hell

597
00:28:25,000 --> 00:28:26,639
Speaker 1: of an orchestrated short squeeze.

598
00:28:26,680 --> 00:28:28,639
Speaker 2: And it was interesting too because you know, retail had

599
00:28:28,680 --> 00:28:31,880
Speaker 2: just been getting less and less relevant as a market force.

600
00:28:33,000 --> 00:28:35,640
Speaker 2: Go pass it totally, like you have a remember IPOs

601
00:28:35,680 --> 00:28:37,159
Speaker 2: back in the day, And that's some things used to

602
00:28:37,160 --> 00:28:39,440
Speaker 2: win them by saying we've got retail right, give us

603
00:28:39,480 --> 00:28:43,000
Speaker 2: that allocation doesn't matter at all anymore, and you know,

604
00:28:43,080 --> 00:28:45,800
Speaker 2: trying to see sort of retail reassert themselves. And I

605
00:28:45,880 --> 00:28:48,200
Speaker 2: think it also I don't know whether they were both

606
00:28:48,240 --> 00:28:50,040
Speaker 2: just riding the same wave or one fuel the other,

607
00:28:50,080 --> 00:28:53,960
Speaker 2: but had that the same sort of populous political establishment, right, right,

608
00:28:54,720 --> 00:28:57,120
Speaker 2: sort of putting your thumb in the eye of the

609
00:28:57,120 --> 00:28:59,920
Speaker 2: political establishment. Same thing in the financial establishment, and.

610
00:29:00,600 --> 00:29:04,440
Speaker 1: Ironically ironically right, it's like, wait, you're gonna all this

611
00:29:05,040 --> 00:29:08,800
Speaker 1: Robinhood is a public company. They're The way they make

612
00:29:08,840 --> 00:29:12,440
Speaker 1: money with their free trades is they sell it. Payment

613
00:29:12,440 --> 00:29:14,840
Speaker 1: for order flow is what it's called. So if you

614
00:29:14,840 --> 00:29:17,640
Speaker 1: don't like the big hedge funds like Citadel or Millennial,

615
00:29:18,240 --> 00:29:20,000
Speaker 1: you're putting money in their pocket.

616
00:29:20,280 --> 00:29:22,760
Speaker 2: Yeah, what's funny about And I'm not an expert on

617
00:29:22,840 --> 00:29:26,480
Speaker 2: payment for or flow, but you know, there's the way

618
00:29:26,480 --> 00:29:28,160
Speaker 2: that I think people commonly look at it is like

619
00:29:28,240 --> 00:29:30,200
Speaker 2: your trades are being sold and people are trading ahead

620
00:29:30,240 --> 00:29:33,760
Speaker 2: of you. That's not really why people buy order flow.

621
00:29:33,800 --> 00:29:37,120
Speaker 2: They do it because it's random and actually uninformed. The

622
00:29:37,160 --> 00:29:40,240
Speaker 2: sense is that retail doesn't know anything that Citadel doesn't,

623
00:29:40,280 --> 00:29:42,520
Speaker 2: so they want that flow to kind of balance stuff out,

624
00:29:42,520 --> 00:29:43,640
Speaker 2: and just well it's val.

625
00:29:44,040 --> 00:29:47,240
Speaker 1: Right, it's volume. If you're getting a cent a share

626
00:29:47,320 --> 00:29:50,600
Speaker 1: on billions of shares, that adds up totally.

627
00:29:50,720 --> 00:29:52,760
Speaker 2: I mean just to say that the deck isn't in

628
00:29:52,800 --> 00:29:56,240
Speaker 2: many ways stacked against retail, But I don't think it's

629
00:29:56,320 --> 00:29:59,560
Speaker 2: some kind of like all it's nonsuming conspiracy. Ken Griffin

630
00:29:59,640 --> 00:30:02,520
Speaker 2: is direct from Miami Beach or whatever.

631
00:30:02,720 --> 00:30:05,680
Speaker 1: Right, if you discovered that the deck is stacked against

632
00:30:05,720 --> 00:30:09,160
Speaker 1: the individual investor in twenty twenty, you're a century late

633
00:30:09,200 --> 00:30:09,600
Speaker 1: to the part.

634
00:30:09,720 --> 00:30:11,840
Speaker 2: But in some ways, actually, it's never been friendlier really,

635
00:30:11,880 --> 00:30:13,560
Speaker 2: So you're talking about, you know, if you want to

636
00:30:13,600 --> 00:30:16,520
Speaker 2: have a basic if you want access to basic investment products,

637
00:30:16,680 --> 00:30:19,320
Speaker 2: it's never been friendly or cheaper, easier.

638
00:30:19,200 --> 00:30:21,120
Speaker 1: Free to trade. You could buy the S and P

639
00:30:21,240 --> 00:30:24,840
Speaker 1: five hundred for four basis points totally. And so the

640
00:30:24,880 --> 00:30:27,240
Speaker 1: best way to beat people at their game is don't

641
00:30:27,240 --> 00:30:28,880
Speaker 1: play their game. Play a different game.

642
00:30:29,160 --> 00:30:31,280
Speaker 2: And they made up this insane game and then somehow

643
00:30:31,360 --> 00:30:33,080
Speaker 2: won it and then lost at it. Everyone seemed to

644
00:30:33,120 --> 00:30:35,640
Speaker 2: lose yours. But no, but I think it was I mean,

645
00:30:35,720 --> 00:30:38,480
Speaker 2: it wasn't strictly a pandemic story, except that, you know,

646
00:30:38,920 --> 00:30:40,640
Speaker 2: if you were sitting in March of twenty twenty and

647
00:30:40,640 --> 00:30:43,720
Speaker 2: you're watching the Dow go from thirty to twenty two

648
00:30:44,080 --> 00:30:45,800
Speaker 2: right in the course of a couple of weeks, the

649
00:30:45,880 --> 00:30:47,760
Speaker 2: idea that it would be hitting fresh highs again like

650
00:30:47,800 --> 00:30:50,880
Speaker 2: by the end of the year seemed insane. And it

651
00:30:50,920 --> 00:30:53,920
Speaker 2: was just such a good reminder that like there was

652
00:30:53,960 --> 00:30:55,280
Speaker 2: no ability to forecast this.

653
00:30:55,560 --> 00:30:58,600
Speaker 1: I thought this was totally a pandemic story. People are

654
00:30:58,600 --> 00:31:02,160
Speaker 1: stuck at home, they don't have the usual outlets, a

655
00:31:02,200 --> 00:31:05,840
Speaker 1: lot of pent up energy, a lot of pent up cash,

656
00:31:05,880 --> 00:31:11,760
Speaker 1: and suddenly this comes along. I loved Investor TikTok because

657
00:31:11,920 --> 00:31:15,840
Speaker 1: there was not a bigger collection of people that you

658
00:31:15,840 --> 00:31:19,800
Speaker 1: you could see the train crash coming, like get out

659
00:31:19,800 --> 00:31:22,440
Speaker 1: of the way, and they didn't want to hear. People

660
00:31:22,720 --> 00:31:25,800
Speaker 1: literally said to them, you guys don't understand what you're

661
00:31:25,800 --> 00:31:29,160
Speaker 1: doing and you're going to get hurt. And your old

662
00:31:29,200 --> 00:31:32,240
Speaker 1: school was the pushback, and then all of those people,

663
00:31:32,520 --> 00:31:35,000
Speaker 1: with very few exceptions got demolished.

664
00:31:35,080 --> 00:31:36,880
Speaker 2: Well, I think it's a pandemic story in two ways.

665
00:31:36,960 --> 00:31:39,000
Speaker 2: Right to your point, people are bored. They are they

666
00:31:39,000 --> 00:31:40,880
Speaker 2: have a lot of cash sitting around, but they could

667
00:31:40,920 --> 00:31:43,080
Speaker 2: have bought the fortune fifty with it.

668
00:31:43,120 --> 00:31:44,240
Speaker 1: They did not.

669
00:31:44,360 --> 00:31:48,160
Speaker 2: For yeah, well, but even more than that, they were angry,

670
00:31:48,360 --> 00:31:50,680
Speaker 2: and there was a lot of angst and they wanted

671
00:31:51,160 --> 00:31:53,360
Speaker 2: they were they were fed up with authority. I mean,

672
00:31:53,600 --> 00:31:56,200
Speaker 2: a huge story coming out of the pandemic is, you know,

673
00:31:56,280 --> 00:31:59,200
Speaker 2: I think fueled by it is this declining trust in

674
00:31:59,240 --> 00:32:02,040
Speaker 2: institutions like why by the S and P fifty when

675
00:32:02,080 --> 00:32:05,520
Speaker 2: you can resurrect you know, some dead retail store from

676
00:32:05,600 --> 00:32:09,200
Speaker 2: your youth. I mean, there was a real political edge

677
00:32:09,200 --> 00:32:09,479
Speaker 2: to it.

678
00:32:10,080 --> 00:32:13,560
Speaker 1: I think that traces back decades or certainly at least

679
00:32:13,560 --> 00:32:17,920
Speaker 1: to the financial crisis, and institutions have been seeing a

680
00:32:17,960 --> 00:32:20,480
Speaker 1: decline and in fact, you know, we'll talk a little

681
00:32:20,480 --> 00:32:23,880
Speaker 1: bit about the Trump administration later, but they very much

682
00:32:24,120 --> 00:32:27,959
Speaker 1: captivated on the hell with the man. I'm anti establishment,

683
00:32:28,120 --> 00:32:30,720
Speaker 1: Vote for me, no doubt about it. But let's talk

684
00:32:30,720 --> 00:32:35,040
Speaker 1: about something else that was very related the Great Resignation.

685
00:32:36,000 --> 00:32:39,000
Speaker 1: I have a pet theory. People stuck at home with

686
00:32:39,160 --> 00:32:43,160
Speaker 1: cash cares act cash in industries they weren't happy about

687
00:32:43,440 --> 00:32:47,040
Speaker 1: took the opportunity to upskill, to look for new jobs,

688
00:32:47,120 --> 00:32:50,240
Speaker 1: to start their own businesses. New business formation in twenty

689
00:32:50,280 --> 00:32:54,480
Speaker 1: twenty and twenty one were huge. What happened during the

690
00:32:54,840 --> 00:32:55,680
Speaker 1: Great Resignation?

691
00:32:56,000 --> 00:32:58,560
Speaker 2: I think it's two things. Like, to your point, yes,

692
00:32:58,680 --> 00:33:02,480
Speaker 2: people we had all as cash. They also, like frankly,

693
00:33:03,360 --> 00:33:05,920
Speaker 2: because they were spending more time with family, in part

694
00:33:05,920 --> 00:33:08,440
Speaker 2: because a lot of people died. You start to kind

695
00:33:08,440 --> 00:33:10,560
Speaker 2: of reassess what you care about in life and if

696
00:33:10,560 --> 00:33:14,040
Speaker 2: you can afford it. Given the stimulus payments, then you

697
00:33:14,080 --> 00:33:16,320
Speaker 2: might do that, But that's not the whole story because

698
00:33:16,400 --> 00:33:19,160
Speaker 2: like those stimulus payments, a lot of estimates out there,

699
00:33:19,240 --> 00:33:21,440
Speaker 2: it seems like probably two to two and a half

700
00:33:21,480 --> 00:33:24,880
Speaker 2: trillion dollars of excess savings during the pandemic. Half of

701
00:33:24,920 --> 00:33:27,120
Speaker 2: that maybe two thirds has been spent down. So like,

702
00:33:27,400 --> 00:33:29,160
Speaker 2: if that's the whole story, then we'll see people go

703
00:33:29,200 --> 00:33:32,720
Speaker 2: back to work very soon, you know, which ultimately wouldn't

704
00:33:32,720 --> 00:33:34,400
Speaker 2: be the worst thing for the economy given where the

705
00:33:34,440 --> 00:33:37,000
Speaker 2: labor work it is. But I think it's actually just

706
00:33:37,000 --> 00:33:39,880
Speaker 2: like a little more complicated than that, which is and

707
00:33:39,920 --> 00:33:41,960
Speaker 2: this is an economic book. I'm not a psychologist, but

708
00:33:42,000 --> 00:33:45,040
Speaker 2: the pandemic was so weird and it was just such

709
00:33:45,080 --> 00:33:46,520
Speaker 2: a reset for a lot of people.

710
00:33:47,080 --> 00:33:49,520
Speaker 1: That's a great word. I've used that phrase. It was

711
00:33:49,560 --> 00:33:54,160
Speaker 1: a great reset where people they rethought their jobs, they

712
00:33:54,160 --> 00:33:58,240
Speaker 1: rethought their relationship between their work life balance, they rethought

713
00:33:58,240 --> 00:34:01,760
Speaker 1: they're commute. Let's talk about hybrid working and the return

714
00:34:01,840 --> 00:34:02,520
Speaker 1: to office.

715
00:34:02,640 --> 00:34:05,400
Speaker 2: I think that's the most lasting change to come out

716
00:34:05,400 --> 00:34:07,160
Speaker 2: of this. I mean people have talked about, you know,

717
00:34:07,200 --> 00:34:09,600
Speaker 2: the digitization of the economy. Actually a lot of that

718
00:34:09,760 --> 00:34:11,800
Speaker 2: to me is overblown. Like if you look at for example,

719
00:34:12,120 --> 00:34:15,040
Speaker 2: years years old totally and I think the pandemic pulled

720
00:34:15,120 --> 00:34:17,359
Speaker 2: forward stuff more than anything else. If you look at

721
00:34:17,360 --> 00:34:20,000
Speaker 2: like exactly retail, e commerce is a percent of retail,

722
00:34:20,239 --> 00:34:22,680
Speaker 2: like it's soreed during the pandemic, but now is basically

723
00:34:22,760 --> 00:34:24,760
Speaker 2: back on the trend line that it would which.

724
00:34:24,360 --> 00:34:29,080
Speaker 1: Was which is dramatically since the late nineties. But you know,

725
00:34:29,160 --> 00:34:29,959
Speaker 1: but the idea that.

726
00:34:29,840 --> 00:34:32,719
Speaker 2: That was like a total stratosphere change, I think is

727
00:34:32,800 --> 00:34:34,760
Speaker 2: not true. The thing that I think is really lasting

728
00:34:34,840 --> 00:34:39,440
Speaker 2: is the relationship between between capital and labor, right between

729
00:34:39,480 --> 00:34:42,360
Speaker 2: management and their employees. You know, I do tell this

730
00:34:42,440 --> 00:34:43,960
Speaker 2: story in the book. You referenced it early on. And

731
00:34:44,040 --> 00:34:46,600
Speaker 2: you've got the CEO Goldman Saxe, who's out in the

732
00:34:46,600 --> 00:34:50,120
Speaker 2: Hampton's on a Friday. Uh, I don't think he was

733
00:34:50,200 --> 00:34:54,000
Speaker 2: using that trip, but I don't have access to the schedule.

734
00:34:54,200 --> 00:34:56,880
Speaker 2: But you know, is waiting in the line at I

735
00:34:56,880 --> 00:34:59,440
Speaker 2: think it's at the Montac Lobster Club. Jury.

736
00:34:59,640 --> 00:35:03,000
Speaker 1: Yeah, remember this, it's always food and cracked me up.

737
00:35:03,040 --> 00:35:05,360
Speaker 1: I noticed that on regular basis.

738
00:35:05,680 --> 00:35:08,320
Speaker 2: I to check that instinct to myself. But and he

739
00:35:08,400 --> 00:35:10,120
Speaker 2: was waiting for a table and a young woman comes

740
00:35:10,200 --> 00:35:12,200
Speaker 2: up to him and says, mister Solomon, I work for you,

741
00:35:12,239 --> 00:35:14,799
Speaker 2: an analystic goldman and me and like six of my

742
00:35:14,840 --> 00:35:16,600
Speaker 2: colleagues points over to some table. We all took the

743
00:35:16,680 --> 00:35:17,880
Speaker 2: day off and came to the beach.

744
00:35:18,640 --> 00:35:20,480
Speaker 1: And some of that is mark smart thing to say

745
00:35:20,520 --> 00:35:23,280
Speaker 1: to the CEO of he was infuriated.

746
00:35:23,680 --> 00:35:26,600
Speaker 2: I tell that story because I think it like sets

747
00:35:26,600 --> 00:35:29,040
Speaker 2: the table for this fight that we are somehow now

748
00:35:29,080 --> 00:35:31,799
Speaker 2: two years later, still having I am. I would say

749
00:35:31,880 --> 00:35:35,439
Speaker 2: the risk of being called like a capitalist show, I'm

750
00:35:35,480 --> 00:35:37,799
Speaker 2: somewhat sympathetic to CEOs here who for a lot of

751
00:35:37,800 --> 00:35:41,600
Speaker 2: the pandemic, especially in places like New York, are walking

752
00:35:41,920 --> 00:35:44,640
Speaker 2: around the city on the weekends and seeing the bars

753
00:35:44,920 --> 00:35:47,440
Speaker 2: packed and then seeing their office is empty on Monday.

754
00:35:47,719 --> 00:35:50,600
Speaker 2: So like the it's not safe for us to come in,

755
00:35:50,719 --> 00:35:53,680
Speaker 2: you are making us risk our lives, like was certainly

756
00:35:53,680 --> 00:35:55,759
Speaker 2: true in the beginning, and you'll remember an outbreak on

757
00:35:55,840 --> 00:36:00,400
Speaker 2: the I think equity trading floor, Morgan, Yeah, where genuinely

758
00:36:00,480 --> 00:36:02,239
Speaker 2: like there were places that were not safe, and I

759
00:36:02,280 --> 00:36:03,560
Speaker 2: talk in the book a lot about the New York

760
00:36:03,560 --> 00:36:06,200
Speaker 2: Stock Exchange for that reason, But at some point that

761
00:36:06,320 --> 00:36:09,240
Speaker 2: just wasn't true anymore. And you know, you talked about

762
00:36:09,520 --> 00:36:13,640
Speaker 2: flexibility and reassessing your priorities, and that's totally fine to

763
00:36:13,719 --> 00:36:16,640
Speaker 2: a point, but there's clearly some professional self indulgence that

764
00:36:16,719 --> 00:36:17,239
Speaker 2: was baked in.

765
00:36:17,400 --> 00:36:20,440
Speaker 1: Here's my pushback to that. Right, the US return to

766
00:36:20,520 --> 00:36:24,080
Speaker 1: office is sixty percent, except in big metropolitan areas where

767
00:36:24,080 --> 00:36:27,920
Speaker 1: it's fifty percent. In Europe it's almost ninety five percent.

768
00:36:28,400 --> 00:36:31,799
Speaker 1: Why is that Their mass transit is much better, their

769
00:36:31,880 --> 00:36:35,480
Speaker 1: cost of housing is much lower. You could live much

770
00:36:35,520 --> 00:36:39,279
Speaker 1: closer to your work. My big takeaway from the pandemic

771
00:36:39,840 --> 00:36:44,000
Speaker 1: is that commuting in America sucks, and sucks in a

772
00:36:44,040 --> 00:36:46,719
Speaker 1: way that, oh my god, I'm not going to do

773
00:36:46,800 --> 00:36:49,319
Speaker 1: this anymore unless I have to. And a lot of

774
00:36:49,360 --> 00:36:54,320
Speaker 1: people decided. You know, it's amazing how we get used

775
00:36:54,360 --> 00:36:58,200
Speaker 1: to something and you just don't question it. Lots of

776
00:36:58,200 --> 00:37:01,400
Speaker 1: people have a two hour community to the office because

777
00:37:01,480 --> 00:37:05,160
Speaker 1: they can afford a place in Rockland, or in Suffolk

778
00:37:05,160 --> 00:37:08,399
Speaker 1: County or in mid New Jersey. Coming into New York

779
00:37:08,480 --> 00:37:13,400
Speaker 1: as an example, and suddenly recapturing three four five hours

780
00:37:13,400 --> 00:37:15,680
Speaker 1: a day, Hey, I don't care if I have to

781
00:37:15,920 --> 00:37:18,960
Speaker 1: make twenty percent less, I'm not doing that.

782
00:37:19,040 --> 00:37:20,919
Speaker 2: I think that I totally agree, though I'm not sure

783
00:37:20,960 --> 00:37:22,640
Speaker 2: that that's a trade most people are willing to make

784
00:37:22,719 --> 00:37:24,680
Speaker 2: right more than Stanley. You imagine, like lot of people

785
00:37:24,680 --> 00:37:26,160
Speaker 2: maybe I'll have to be here, but we're going to

786
00:37:26,200 --> 00:37:27,839
Speaker 2: pay you for where you live, and people like lost

787
00:37:27,880 --> 00:37:30,080
Speaker 2: their minds about it. You know, there was a study

788
00:37:30,080 --> 00:37:31,480
Speaker 2: a couple of months ago. I'd have to go pull it,

789
00:37:31,520 --> 00:37:33,279
Speaker 2: but that I think I found that Americans has got

790
00:37:33,280 --> 00:37:35,719
Speaker 2: like ninety three minutes back or something from work from

791
00:37:35,719 --> 00:37:38,120
Speaker 2: home a day a day, and it you know, spent it.

792
00:37:38,160 --> 00:37:40,320
Speaker 2: I think it was a little bit of a gender split,

793
00:37:40,360 --> 00:37:42,040
Speaker 2: but like spent it, you know, a third to third

794
00:37:42,040 --> 00:37:44,880
Speaker 2: to third on like work, personal life and caregiving and

795
00:37:44,920 --> 00:37:47,760
Speaker 2: some other things. Right, And I don't remember the numbers.

796
00:37:47,760 --> 00:37:49,360
Speaker 2: You could check me in Europe, but they were lower,

797
00:37:49,400 --> 00:37:50,920
Speaker 2: and then in Asia they were like one hundred and

798
00:37:50,960 --> 00:37:53,640
Speaker 2: twenty minutes. So there's some I'd be curious to see

799
00:37:53,680 --> 00:37:55,479
Speaker 2: what happens if you overlay that. But I think there's

800
00:37:55,480 --> 00:37:58,480
Speaker 2: this frog boiling thing, which is you're commute. As your

801
00:37:58,520 --> 00:38:00,760
Speaker 2: life gets more complicated, to get older, you get wealthier,

802
00:38:01,040 --> 00:38:03,440
Speaker 2: kind of just expands and it doesn't occur to you

803
00:38:03,480 --> 00:38:06,160
Speaker 2: that that's weird to spend three hours every day because

804
00:38:06,160 --> 00:38:08,040
Speaker 2: everybody does it, and then you don't do it anymore,

805
00:38:08,080 --> 00:38:09,600
Speaker 2: and you realize this is great thing.

806
00:38:09,680 --> 00:38:12,120
Speaker 1: That the thing that I found so amusing in the

807
00:38:12,160 --> 00:38:15,040
Speaker 1: first on a couple of quarters of the pandemic, the

808
00:38:15,080 --> 00:38:19,040
Speaker 1: productivity numbers go through the roof. People are working longer hours,

809
00:38:19,120 --> 00:38:22,200
Speaker 1: and they just seem to be doing a better job

810
00:38:22,280 --> 00:38:23,160
Speaker 1: at first.

811
00:38:23,120 --> 00:38:25,160
Speaker 2: Yes, but then they start to And I think it

812
00:38:25,200 --> 00:38:27,480
Speaker 2: was Jamie Diamond last year who said, you know, as

813
00:38:27,520 --> 00:38:29,759
Speaker 2: you can imagine, we keep quite close tabs in our

814
00:38:29,800 --> 00:38:32,560
Speaker 2: employees and we noticed that productivity on Fridays is really

815
00:38:32,600 --> 00:38:35,200
Speaker 2: love right, which like maybe we should have a four

816
00:38:35,239 --> 00:38:37,239
Speaker 2: day work week. That's a totally note, so far over

817
00:38:37,280 --> 00:38:39,640
Speaker 2: and totally not far off. There's actually a lot of pilots,

818
00:38:39,640 --> 00:38:41,480
Speaker 2: mostly in Europe that are really interesting about this.

819
00:38:42,120 --> 00:38:44,000
Speaker 1: I love the stories about the people who didn't take

820
00:38:44,000 --> 00:38:46,759
Speaker 1: Fridays off. They took two jobs, and we're doing two

821
00:38:46,760 --> 00:38:50,600
Speaker 1: full jobs, time jobs at once, and nobody knew a

822
00:38:50,680 --> 00:38:51,480
Speaker 1: company figured out.

823
00:38:51,560 --> 00:38:54,759
Speaker 2: Yeah yeah no. But I think to your point, journalism

824
00:38:54,840 --> 00:38:57,080
Speaker 2: is an apprentice business, right. I learned how to do

825
00:38:57,120 --> 00:38:58,640
Speaker 2: it by sitting next to people who are really good

826
00:38:58,640 --> 00:39:00,000
Speaker 2: at it.

827
00:39:00,000 --> 00:39:02,480
Speaker 1: The job is like that, right, but it's like very

828
00:39:02,480 --> 00:39:03,440
Speaker 1: fair issue.

829
00:39:03,520 --> 00:39:06,120
Speaker 2: A lot of businesses like that, right, Like you I

830
00:39:06,160 --> 00:39:08,480
Speaker 2: would hear senior reporters on the phone, like learning how

831
00:39:08,480 --> 00:39:10,680
Speaker 2: to talk to a source, you follow someone to a meeting,

832
00:39:11,040 --> 00:39:12,760
Speaker 2: you know, you learn how to deal with a client.

833
00:39:12,800 --> 00:39:16,960
Speaker 2: That stuff is soft and is really hard to do remotely.

834
00:39:17,000 --> 00:39:19,040
Speaker 2: And I think, you know, I think what young people

835
00:39:19,040 --> 00:39:22,200
Speaker 2: actually want is I think they're mostly okay going in,

836
00:39:22,239 --> 00:39:25,600
Speaker 2: but they want real value. They don't Taco Tuesday. They

837
00:39:25,600 --> 00:39:27,440
Speaker 2: want to say, if I'm here, I need to go

838
00:39:27,480 --> 00:39:28,640
Speaker 2: to that meeting, right.

839
00:39:28,560 --> 00:39:30,919
Speaker 1: Like collaboration, mentorship, training, trail.

840
00:39:31,000 --> 00:39:33,400
Speaker 2: Places that you're seeing the most turnover with still some

841
00:39:33,480 --> 00:39:35,120
Speaker 2: data on this. The other day are the why am

842
00:39:35,120 --> 00:39:37,680
Speaker 2: I here? Jobs? Right, which is the ones where people

843
00:39:38,360 --> 00:39:39,920
Speaker 2: never left or have to go in. They work an

844
00:39:39,920 --> 00:39:41,560
Speaker 2: assembly line, they got to physically be there.

845
00:39:41,600 --> 00:39:42,080
Speaker 1: They get that.

846
00:39:42,520 --> 00:39:45,400
Speaker 2: And then the ones where people understand that they can

847
00:39:45,440 --> 00:39:48,640
Speaker 2: be remote. I'm I'm often remote because I'm out meeting

848
00:39:48,680 --> 00:39:51,520
Speaker 2: sources or traveling or working at home or whatever. It's

849
00:39:51,560 --> 00:39:53,200
Speaker 2: the ones in the middle where they're like, why am

850
00:39:53,280 --> 00:39:55,080
Speaker 2: I here? This is a job that I could very

851
00:39:55,160 --> 00:39:57,360
Speaker 2: much do from home and I'm not getting any additional

852
00:39:57,760 --> 00:40:01,040
Speaker 2: support or mentorship or encouragement, those the people who are quitting.

853
00:40:01,239 --> 00:40:05,240
Speaker 1: My favorite story of that era was in the Washington

854
00:40:05,280 --> 00:40:09,640
Speaker 1: Post about companies making people come into the office to do.

855
00:40:09,719 --> 00:40:12,279
Speaker 2: Zoom calls well and right, because there's this sort of

856
00:40:12,360 --> 00:40:14,799
Speaker 2: equity belief right that there's some and by the way,

857
00:40:14,840 --> 00:40:16,160
Speaker 2: I think a lot of this where we're said, after

858
00:40:16,160 --> 00:40:19,600
Speaker 2: the first promotion cycle, when people realize that there's a

859
00:40:19,680 --> 00:40:22,920
Speaker 2: huge advantage and it's actually unfortunate. I think if you

860
00:40:23,000 --> 00:40:27,239
Speaker 2: track these cohorts, because the people for whom flexibility is

861
00:40:27,440 --> 00:40:30,960
Speaker 2: deemed to be the most valuable are frankly like women

862
00:40:31,000 --> 00:40:33,759
Speaker 2: with kids, you know, minorities who have like much further

863
00:40:33,800 --> 00:40:36,879
Speaker 2: commutes and tougher personal situations that they need more time

864
00:40:36,920 --> 00:40:38,480
Speaker 2: to deal with. But I actually think it's going to

865
00:40:38,560 --> 00:40:41,040
Speaker 2: work against them, which is that the people who can afford,

866
00:40:41,239 --> 00:40:42,960
Speaker 2: you know, for a bunch of reasons to come in

867
00:40:43,000 --> 00:40:45,480
Speaker 2: every day and see the boss and slap some backs,

868
00:40:45,480 --> 00:40:47,880
Speaker 2: you're going to get going to get over promoted. And

869
00:40:47,880 --> 00:40:49,440
Speaker 2: we're starting to see it now. We'll see how it

870
00:40:49,440 --> 00:40:52,880
Speaker 2: shakes out in the commercial real estate market. But companies

871
00:40:52,880 --> 00:40:55,000
Speaker 2: are upgrading their space but needing less of it, so

872
00:40:55,080 --> 00:40:58,160
Speaker 2: trying to figure out how to actually right size your

873
00:40:58,160 --> 00:41:01,480
Speaker 2: footprint and have an office to people want to be in.

874
00:41:01,800 --> 00:41:05,520
Speaker 1: Yeah, that's absolutely true. It's fascinating. So I'm in the

875
00:41:05,560 --> 00:41:11,280
Speaker 1: office yesterday and we have this new division that we launched,

876
00:41:11,320 --> 00:41:13,600
Speaker 1: and we have people in from around the country, and

877
00:41:14,000 --> 00:41:15,879
Speaker 1: it's like, wow, I forgot what was like to have

878
00:41:16,000 --> 00:41:20,240
Speaker 1: twenty thirty people in an office that normally holds twenty people,

879
00:41:20,440 --> 00:41:23,880
Speaker 1: but the past year has been eight, ten, twelve people.

880
00:41:24,080 --> 00:41:26,759
Speaker 1: It's like everything's popping. We bring in lunch, it's this

881
00:41:26,840 --> 00:41:29,240
Speaker 1: and that. Wow, this is kind of fun. I forgot

882
00:41:29,280 --> 00:41:31,520
Speaker 1: how much fun it can be when you've an office

883
00:41:31,520 --> 00:41:38,239
Speaker 1: full of people. We're more startup than established entity, so

884
00:41:38,440 --> 00:41:41,919
Speaker 1: not everybody has that ability. I'm not sure how much

885
00:41:41,960 --> 00:41:45,120
Speaker 1: i'd buy into the you must be here for culture.

886
00:41:46,000 --> 00:41:49,640
Speaker 1: I've been hearing a lot of that lately. But the FaceTime,

887
00:41:49,680 --> 00:41:55,240
Speaker 1: the collaboration, the mentorship, just the learning how companies operate,

888
00:41:55,760 --> 00:41:58,279
Speaker 1: that's got to be a huge, huge aspect of this

889
00:41:58,320 --> 00:41:58,719
Speaker 1: whole thing.

890
00:41:58,920 --> 00:42:01,640
Speaker 2: I completely agree. And I mean, look, it's every generation

891
00:42:01,719 --> 00:42:03,440
Speaker 2: kind of shakes their fists the next one. So these

892
00:42:03,520 --> 00:42:05,400
Speaker 2: kids have no respect, they don't know how anything works.

893
00:42:05,400 --> 00:42:07,279
Speaker 2: But I do think like losing two years of that

894
00:42:07,360 --> 00:42:10,040
Speaker 2: if you were in your twenties starting out, like, yeah,

895
00:42:10,040 --> 00:42:13,799
Speaker 2: there's a lot of just sort of like passive osmosis

896
00:42:13,840 --> 00:42:14,760
Speaker 2: that happens.

897
00:42:14,680 --> 00:42:19,319
Speaker 1: That you miss out on when you're remote. And you know,

898
00:42:20,080 --> 00:42:22,520
Speaker 1: whenever we see like a zoom call with twenty thirty

899
00:42:22,600 --> 00:42:25,680
Speaker 1: forty people on it, it's usually one person, maybe two

900
00:42:25,760 --> 00:42:30,480
Speaker 1: people speaking, and it's wait, I have to give you

901
00:42:30,520 --> 00:42:32,880
Speaker 1: my full attention for an hour. That seems like a

902
00:42:32,960 --> 00:42:36,480
Speaker 1: lot for very little in return in terms of what

903
00:42:36,520 --> 00:42:39,920
Speaker 1: you're learning the like that could be a if it's

904
00:42:39,960 --> 00:42:43,240
Speaker 1: a half a page memo instead of fifty people spending

905
00:42:43,280 --> 00:42:46,640
Speaker 1: an hour, isn't it more efficient to say important read

906
00:42:46,680 --> 00:42:47,680
Speaker 1: this as opposed to.

907
00:42:47,920 --> 00:42:50,160
Speaker 2: That's the old joke, right, this meeting could have been

908
00:42:50,160 --> 00:42:51,840
Speaker 2: an email. This email could have been a slack. The

909
00:42:51,920 --> 00:42:54,800
Speaker 2: slack could have not existed, Like whenever there's some inflation

910
00:42:54,920 --> 00:42:57,160
Speaker 2: that happens, and I think it's good that some of

911
00:42:57,160 --> 00:42:59,480
Speaker 2: that got dispensed with. But and look, maybe I'll be

912
00:42:59,520 --> 00:43:02,760
Speaker 2: wrong about that, but like ar VR, it doesn't seem

913
00:43:02,760 --> 00:43:06,600
Speaker 2: like a replacement to me, Like the replacement seem bad.

914
00:43:07,239 --> 00:43:08,480
Speaker 2: Like if you don't want to have a meeting, don't

915
00:43:08,520 --> 00:43:10,280
Speaker 2: have a meeting. We don't have a fake meeting, right.

916
00:43:10,680 --> 00:43:12,400
Speaker 1: I'm with you on it. By the way, what you said.

917
00:43:12,640 --> 00:43:17,120
Speaker 1: My colleague Mike Batnik had a hilarious tweet which was,

918
00:43:17,600 --> 00:43:20,799
Speaker 1: most books should be magazine articles, most magazine articles should

919
00:43:20,840 --> 00:43:23,839
Speaker 1: be tweets, and most tweets should be deleted, which I

920
00:43:23,880 --> 00:43:25,480
Speaker 1: find to be I hope not this one. I hope

921
00:43:25,480 --> 00:43:29,120
Speaker 1: this one justified. So just so you know, what I

922
00:43:29,200 --> 00:43:32,920
Speaker 1: found so interesting about the book is it reads so

923
00:43:33,000 --> 00:43:35,839
Speaker 1: we all went through this pandemic together. We all more

924
00:43:35,960 --> 00:43:39,640
Speaker 1: or less experienced maybe eighty percent of the same stuff.

925
00:43:39,680 --> 00:43:42,040
Speaker 1: The concern about what's going to happen with my job,

926
00:43:42,120 --> 00:43:44,279
Speaker 1: what's gonna happen with the economy? Am I going to

927
00:43:44,320 --> 00:43:47,759
Speaker 1: get sick? I'll never forget walking the dog around the

928
00:43:47,760 --> 00:43:50,680
Speaker 1: block and watching a guy spray a package that was

929
00:43:50,719 --> 00:43:55,000
Speaker 1: delivered with light sool? How long did we idiotically wash

930
00:43:55,120 --> 00:43:58,160
Speaker 1: down our groceries like? There was a lot of confusion

931
00:43:58,239 --> 00:44:00,960
Speaker 1: as to what was going on, So most of us

932
00:44:01,080 --> 00:44:04,640
Speaker 1: had a very similar experience. What I really found entrancing

933
00:44:04,680 --> 00:44:07,040
Speaker 1: about the book is, oh, there were a lot of

934
00:44:07,040 --> 00:44:13,000
Speaker 1: people that had an incredibly more stressful, more at risk,

935
00:44:13,360 --> 00:44:22,680
Speaker 1: higher level real economic catastrophe experience. Than I had, and

936
00:44:23,120 --> 00:44:27,360
Speaker 1: you use their storylines and the characters of the CEO

937
00:44:27,440 --> 00:44:31,279
Speaker 1: of Delta and American Airline and Airbnb and Ford and

938
00:44:31,520 --> 00:44:34,759
Speaker 1: Hilton then on and on and Goldman Sachs to tell

939
00:44:34,800 --> 00:44:37,080
Speaker 1: a story. I feel like I got to look behind

940
00:44:37,080 --> 00:44:40,440
Speaker 1: the curtain of stuff that we all kind of suspected

941
00:44:40,560 --> 00:44:43,480
Speaker 1: was going on during the pandemic, but most of us

942
00:44:43,480 --> 00:44:45,080
Speaker 1: had no idea. And that's what made the book so

943
00:44:45,160 --> 00:44:47,880
Speaker 1: interesting to me. It's like, oh, there was some serious

944
00:44:47,920 --> 00:44:50,440
Speaker 1: ish going down as it's all unfolded.

945
00:44:50,560 --> 00:44:51,640
Speaker 2: I mean, first all, thank you.

946
00:44:52,200 --> 00:44:53,760
Speaker 1: Is that a fair description of the book?

947
00:44:53,840 --> 00:44:54,239
Speaker 2: I hope.

948
00:44:54,280 --> 00:44:54,360
Speaker 1: So.

949
00:44:54,440 --> 00:44:55,880
Speaker 2: I mean, at some point you get so close to

950
00:44:55,920 --> 00:44:57,759
Speaker 2: these projects you kind of can't see them. So it's

951
00:44:57,760 --> 00:45:00,600
Speaker 2: always nice to hear it from readers. But you know,

952
00:45:00,640 --> 00:45:03,520
Speaker 2: I think, well, just a high level one thing that

953
00:45:03,560 --> 00:45:05,680
Speaker 2: I kind of wasn't aware of at the time was like,

954
00:45:05,840 --> 00:45:08,839
Speaker 2: just how close it came to being really worse, right,

955
00:45:09,280 --> 00:45:12,799
Speaker 2: really really bad? And in some respects, I just think

956
00:45:12,800 --> 00:45:15,160
Speaker 2: the economic toll would have been worse if the pandemic

957
00:45:15,200 --> 00:45:17,359
Speaker 2: itself was not quite as bad. Right, There is a

958
00:45:17,680 --> 00:45:20,399
Speaker 2: sort of a thought experiment that you can do. We're like, okay,

959
00:45:20,400 --> 00:45:22,960
Speaker 2: we've a pandemic that's half as bad, right, I'm not

960
00:45:23,000 --> 00:45:27,359
Speaker 2: sure it generates the same reaction reaction same. You don't

961
00:45:27,360 --> 00:45:29,520
Speaker 2: get six trillion dollars, you don't, you know, you get

962
00:45:29,600 --> 00:45:33,160
Speaker 2: real divergence and outcomes, which ultimately I'll tell you a

963
00:45:33,200 --> 00:45:36,440
Speaker 2: funny story that at some point the sub head of

964
00:45:36,440 --> 00:45:39,279
Speaker 2: the subtitle of the book I think was fortune and

965
00:45:39,360 --> 00:45:42,080
Speaker 2: Failure and Fortune and the pandemic Economy or something like that.

966
00:45:42,360 --> 00:45:45,560
Speaker 2: At some point, I don't know, late it's twenty twenty one.

967
00:45:45,680 --> 00:45:47,759
Speaker 2: Talking to my publisher, I was like, you know, Paul, like,

968
00:45:47,880 --> 00:45:49,680
Speaker 2: not a lot of failure at the end of the day, right.

969
00:45:49,680 --> 00:45:52,160
Speaker 2: I think corporate bankruptcies were like an all time low

970
00:45:52,280 --> 00:45:52,959
Speaker 2: in twenty twenty.

971
00:45:53,280 --> 00:45:55,279
Speaker 1: You had a handful of retailers, and a lot of

972
00:45:55,560 --> 00:45:59,040
Speaker 1: it was mostly local, local restaurants and dry cleaners and

973
00:45:59,080 --> 00:46:01,640
Speaker 1: things like that. But it wasn't the big company, no, right.

974
00:46:01,680 --> 00:46:05,160
Speaker 2: And I think had the pandemic been just not as bad,

975
00:46:05,200 --> 00:46:09,480
Speaker 2: you wouldn't have seen that incredible geyser of financial support.

976
00:46:09,760 --> 00:46:13,840
Speaker 1: I have a vivid recollection of early twenty twenty of

977
00:46:13,920 --> 00:46:17,400
Speaker 1: a Congress that was so divided that a bill was

978
00:46:17,440 --> 00:46:21,680
Speaker 1: introduced to rename a library and they couldn't move it forward.

979
00:46:22,120 --> 00:46:26,120
Speaker 1: And then the pandemic hits, and the biggest fiscal stimulus

980
00:46:26,120 --> 00:46:29,720
Speaker 1: in history Cares. Act One passes. It's ten percent of GDP,

981
00:46:29,880 --> 00:46:34,840
Speaker 1: It's over two trillion dollars. How did this massive fiscal

982
00:46:34,880 --> 00:46:37,560
Speaker 1: stimulus come together in such a short period of time.

983
00:46:38,040 --> 00:46:41,720
Speaker 2: On the economic side, I think the government did quite well.

984
00:46:42,200 --> 00:46:44,320
Speaker 2: I actually think I'm sort of an undersung here on

985
00:46:44,360 --> 00:46:46,320
Speaker 2: all this. To Steven Minichen, I think really deserves a

986
00:46:46,320 --> 00:46:49,840
Speaker 2: lot of credit. And frankly, you know, before the pandemic,

987
00:46:49,880 --> 00:46:52,480
Speaker 2: when he became Treasury secretary, he had obviously worked on

988
00:46:52,520 --> 00:46:54,440
Speaker 2: Waltreet to come out of Goldman sacks. He ask people

989
00:46:55,000 --> 00:46:57,320
Speaker 2: that there was like super high confidence that he was

990
00:46:57,360 --> 00:46:59,080
Speaker 2: going to make his mark, and you know, a lot

991
00:46:59,120 --> 00:47:01,719
Speaker 2: of jobs and Treasury remained unfilled. I mean, the administration

992
00:47:01,880 --> 00:47:03,280
Speaker 2: was very chaotic.

993
00:47:03,200 --> 00:47:06,080
Speaker 1: Very slow to fill across the whole board. Every every

994
00:47:06,440 --> 00:47:07,920
Speaker 1: department was totally.

995
00:47:07,640 --> 00:47:11,640
Speaker 2: And so this was like an understaffed financial regulatory apparatus

996
00:47:11,719 --> 00:47:15,440
Speaker 2: run by someone pretty unknown that I'm not sure the

997
00:47:15,480 --> 00:47:17,560
Speaker 2: Street specifically had a ton of confidence in, and I

998
00:47:17,560 --> 00:47:20,480
Speaker 2: think really nailed it. So there's two pieces of this, right,

999
00:47:20,480 --> 00:47:25,160
Speaker 2: There's the fiscal stimulus side, Congress, and look, nothing brings

1000
00:47:25,200 --> 00:47:27,920
Speaker 2: people together like a crisis. They are you know this.

1001
00:47:28,200 --> 00:47:29,680
Speaker 2: That's the other thing too, is that I tried to

1002
00:47:29,719 --> 00:47:31,520
Speaker 2: kind of get back in the book. You gotta remember

1003
00:47:31,960 --> 00:47:37,120
Speaker 2: early pandemic. It became this terrible, toxic, sludged Groundhog's Day forever.

1004
00:47:37,160 --> 00:47:39,280
Speaker 2: But it didn't start that way. It started out as

1005
00:47:39,560 --> 00:47:43,640
Speaker 2: as kind of a unifying, weirdly earnest moment of.

1006
00:47:43,560 --> 00:47:46,040
Speaker 1: Like genuine threat gineet.

1007
00:47:46,440 --> 00:47:48,759
Speaker 2: It was obviously important at the moment, and it felt

1008
00:47:48,800 --> 00:47:51,680
Speaker 2: that way, which is unusual, and I kind of wanted

1009
00:47:51,680 --> 00:47:53,759
Speaker 2: to try to bring people back to that moment that

1010
00:47:53,880 --> 00:47:56,080
Speaker 2: now sort of seems sort of sacharine and stupid that

1011
00:47:56,080 --> 00:47:58,239
Speaker 2: we banged pots out of windows, and you know.

1012
00:47:58,320 --> 00:47:59,480
Speaker 1: At the time it didn't see.

1013
00:47:59,400 --> 00:48:01,160
Speaker 2: Congress like on the steps. I mean, the whole thing

1014
00:48:01,200 --> 00:48:01,720
Speaker 2: was goofy.

1015
00:48:01,840 --> 00:48:04,400
Speaker 1: So you you have a little bit of criticis you

1016
00:48:04,480 --> 00:48:10,040
Speaker 1: both compliment and criticize the Trump administration, And we're talking

1017
00:48:10,040 --> 00:48:12,640
Speaker 1: about the key players. On the one hand, you have

1018
00:48:12,760 --> 00:48:15,759
Speaker 1: the Treasury Department, which really seems to be doing its

1019
00:48:15,760 --> 00:48:18,359
Speaker 1: best to hold things together. On the other hand, there's

1020
00:48:18,400 --> 00:48:22,959
Speaker 1: the White House and the CDC. How did both those

1021
00:48:22,960 --> 00:48:23,440
Speaker 1: groups do?

1022
00:48:23,680 --> 00:48:26,600
Speaker 2: Look, I don't think this is a partisan a political statement.

1023
00:48:26,600 --> 00:48:29,239
Speaker 2: But the White House did not cover themselves in glory here,

1024
00:48:29,280 --> 00:48:31,960
Speaker 2: and neither did the CDC, which, by you know, it's

1025
00:48:32,040 --> 00:48:35,959
Speaker 2: not an overly political organization. Right. Just the science was bad,

1026
00:48:36,120 --> 00:48:38,839
Speaker 2: and I don't think it was certainly not a conspiracy.

1027
00:48:39,120 --> 00:48:44,720
Speaker 1: The communication was bad. Also, it was very confused, right, yeah, exactly.

1028
00:48:45,400 --> 00:48:47,640
Speaker 1: I always like to tell people if you don't think

1029
00:48:47,640 --> 00:48:50,520
Speaker 1: you should wear a mask whenever you have surgery, tell

1030
00:48:50,560 --> 00:48:52,759
Speaker 1: everybody in the operating room don't bother with the masks.

1031
00:48:52,760 --> 00:48:54,480
Speaker 1: They don't do anything, right.

1032
00:48:54,440 --> 00:48:56,799
Speaker 2: Yeah, yeah, Look, I mean there were plenty of great

1033
00:48:56,800 --> 00:48:59,960
Speaker 2: books written about the Trump White House, and to Washington

1034
00:49:00,000 --> 00:49:03,640
Speaker 2: Post reporters wrote a great book about the health response itself.

1035
00:49:03,880 --> 00:49:07,160
Speaker 2: Schulie read looking at sort of the world that I know.

1036
00:49:07,600 --> 00:49:10,719
Speaker 2: The economic side, I think did a really good job

1037
00:49:11,880 --> 00:49:14,200
Speaker 2: with a couple of important caveats, the first one of

1038
00:49:14,239 --> 00:49:18,720
Speaker 2: which is the spicket was open too wide for too long.

1039
00:49:19,360 --> 00:49:22,640
Speaker 2: That last round of stimulus AID in was it April

1040
00:49:22,680 --> 00:49:26,480
Speaker 2: of twenty one pretty clearly unnecessary both from like a

1041
00:49:26,680 --> 00:49:30,880
Speaker 2: household wealth perspective and actually, just the other day I

1042
00:49:30,880 --> 00:49:33,560
Speaker 2: did a story looking back at the airline AID and

1043
00:49:33,760 --> 00:49:37,600
Speaker 2: very clearly that last round of aid totally unnecessary. The

1044
00:49:37,640 --> 00:49:40,399
Speaker 2: first one very clearly necessary and well done. You could

1045
00:49:40,480 --> 00:49:42,040
Speaker 2: argue about the second one, which is at the end

1046
00:49:42,040 --> 00:49:43,360
Speaker 2: of twenty twenty.

1047
00:49:43,160 --> 00:49:45,800
Speaker 1: So let me ask you. That leads to an obvious question.

1048
00:49:46,200 --> 00:49:52,360
Speaker 1: The airlines as an industry got this giant package. Most

1049
00:49:52,400 --> 00:49:55,800
Speaker 1: other industries did not see the same. So the hotel

1050
00:49:55,840 --> 00:49:58,640
Speaker 1: industry didn't get that. The restaurant industry didn't get that.

1051
00:49:58,880 --> 00:50:01,319
Speaker 1: There were a lot, real detail, there were a lot

1052
00:50:01,360 --> 00:50:05,680
Speaker 1: of industries that the pandemic really tore a swath through

1053
00:50:06,640 --> 00:50:09,000
Speaker 1: that did not seem to have the same sort of

1054
00:50:09,800 --> 00:50:13,239
Speaker 1: luck in getting Congress to How do you explain that

1055
00:50:13,520 --> 00:50:16,240
Speaker 1: you're right good lobbyists or right parts right time, partly

1056
00:50:16,280 --> 00:50:20,439
Speaker 1: good lobbying, but fundamentally airlines and actually banks too, which

1057
00:50:20,440 --> 00:50:22,680
Speaker 1: is why those tend to be the industries that we

1058
00:50:22,800 --> 00:50:24,000
Speaker 1: have to bail out every so often.

1059
00:50:24,440 --> 00:50:28,520
Speaker 2: Are national resources in private hands. Planes are national resources.

1060
00:50:28,520 --> 00:50:30,319
Speaker 2: We need to have them, and we decided that we'd

1061
00:50:30,400 --> 00:50:32,480
Speaker 2: rather have the private sector manage them than the government

1062
00:50:33,719 --> 00:50:36,040
Speaker 2: for I don't know, customer serves reasons, I don't.

1063
00:50:35,800 --> 00:50:40,440
Speaker 1: Know, but like, but those big things bad no matter who.

1064
00:50:40,280 --> 00:50:43,040
Speaker 2: Doesn't it you know it is a and actually I

1065
00:50:43,040 --> 00:50:44,799
Speaker 2: think the first time we meet in an airline ceo

1066
00:50:44,800 --> 00:50:46,719
Speaker 2: in the book, it's it's Ed Bastion from Delta and

1067
00:50:46,760 --> 00:50:49,480
Speaker 2: he's at the Consumer Electronic Show in Las Vegas in

1068
00:50:49,560 --> 00:50:52,520
Speaker 2: January of twenty twenty giving a keynote, which is a

1069
00:50:52,560 --> 00:50:55,600
Speaker 2: weird place for an airline CEO to be. This is

1070
00:50:55,600 --> 00:51:00,359
Speaker 2: a gadget show, right, and he's talking about, you know,

1071
00:51:00,400 --> 00:51:04,680
Speaker 2: the seepback entertainment should be a streaming platform, right. They're

1072
00:51:04,760 --> 00:51:08,120
Speaker 2: they're gonna have this bionic software that shows you your

1073
00:51:08,160 --> 00:51:10,359
Speaker 2: itinerary when you look at a screen. I mean, really

1074
00:51:10,440 --> 00:51:13,680
Speaker 2: like next level stuff. And I tell that story as

1075
00:51:13,719 --> 00:51:18,360
Speaker 2: a reminder that, like, airlines are an incredibly capital intensive

1076
00:51:18,400 --> 00:51:21,960
Speaker 2: business that involve flying really expensive hunks of metal around

1077
00:51:22,239 --> 00:51:25,680
Speaker 2: and every like ten to fifteen years something bad happens,

1078
00:51:25,719 --> 00:51:28,080
Speaker 2: and they had forgotten that. I think that industry had

1079
00:51:28,120 --> 00:51:30,759
Speaker 2: really thought they had escaped that boom and bus cycle.

1080
00:51:30,840 --> 00:51:33,160
Speaker 2: So plenty of arrogance coming into this. Plenty of people

1081
00:51:33,200 --> 00:51:35,480
Speaker 2: have rightly pointed out that they spent something like ninety

1082
00:51:35,480 --> 00:51:38,920
Speaker 2: six percent of their free cash flow on stock buybacks totally,

1083
00:51:38,960 --> 00:51:41,120
Speaker 2: but like, had they spent eighty percent, that wouldn't have

1084
00:51:41,160 --> 00:51:41,960
Speaker 2: saved them either.

1085
00:51:42,200 --> 00:51:44,320
Speaker 1: Right, unless they didn't know stock buybacks.

1086
00:51:44,400 --> 00:51:46,239
Speaker 2: Well, you can have a company that is one hundred

1087
00:51:46,280 --> 00:51:48,520
Speaker 2: percent cash, but like that CEO won't have a job

1088
00:51:48,560 --> 00:51:50,319
Speaker 2: for very long because some investors are going to come

1089
00:51:50,320 --> 00:51:52,240
Speaker 2: in saying, what are you doing? Right, there's an optimal

1090
00:51:52,280 --> 00:51:56,440
Speaker 2: capital structure, but there's not an optimal capital structure for

1091
00:51:56,480 --> 00:52:00,360
Speaker 2: a pandemic. And so look, and especially if the government

1092
00:52:00,440 --> 00:52:03,200
Speaker 2: is saying it's not just the market telling you we

1093
00:52:03,239 --> 00:52:05,120
Speaker 2: don't want to fly, it's a government in a lot

1094
00:52:05,120 --> 00:52:08,160
Speaker 2: of cases saying you cannot fly. Right, we're shutting down

1095
00:52:08,200 --> 00:52:10,920
Speaker 2: your business, which is a wild thing to do in

1096
00:52:10,960 --> 00:52:15,359
Speaker 2: a capitalist society. And so look, ultimately, like I didn't

1097
00:52:15,360 --> 00:52:18,160
Speaker 2: accounting of this recently for someophore And the bill comes

1098
00:52:18,200 --> 00:52:20,880
Speaker 2: to something like sixty two billion dollars out the door,

1099
00:52:21,600 --> 00:52:25,320
Speaker 2: of which less than a third is designed to be repaid.

1100
00:52:26,320 --> 00:52:28,399
Speaker 2: And that's sort of the math. There's some interest ration

1101
00:52:28,480 --> 00:52:31,319
Speaker 2: warrants getting out there that are somehow still underwater three

1102
00:52:31,400 --> 00:52:33,440
Speaker 2: years later should tell you something about the markets.

1103
00:52:33,840 --> 00:52:37,560
Speaker 1: But like, even though good luck booking a flight, everything.

1104
00:52:37,280 --> 00:52:40,480
Speaker 2: Is can you imagine that? So the travel hell that

1105
00:52:40,520 --> 00:52:43,239
Speaker 2: we went through in twenty twenty one, twenty two. Can

1106
00:52:43,239 --> 00:52:44,839
Speaker 2: you imagine how much worse that would have been if

1107
00:52:44,840 --> 00:52:47,680
Speaker 2: you'd had hundreds of thousands of people kicked off of payrolls.

1108
00:52:48,040 --> 00:52:51,280
Speaker 2: They lose their training, right, This is an incredibly regulated industry.

1109
00:52:51,600 --> 00:52:53,359
Speaker 2: At the same time that a lot of airlines were

1110
00:52:53,400 --> 00:52:56,719
Speaker 2: modernizing their their fleets, so having to retrain pilots on

1111
00:52:56,800 --> 00:52:58,560
Speaker 2: new planes, I mean, they just would have been a disaster.

1112
00:52:58,680 --> 00:53:01,319
Speaker 2: And by the way, like fire them. The government page

1113
00:53:01,320 --> 00:53:03,920
Speaker 2: for them anyway on unemployment, which is less efficient.

1114
00:53:04,320 --> 00:53:06,640
Speaker 1: So let's talk about Ford. You know, we haven't really

1115
00:53:06,640 --> 00:53:09,399
Speaker 1: brought them up. The CEO of Ford has a big

1116
00:53:09,480 --> 00:53:12,560
Speaker 1: role in here. Like they did during World War Two,

1117
00:53:12,600 --> 00:53:15,680
Speaker 1: where they built bombers and tanks and things like that,

1118
00:53:16,600 --> 00:53:22,240
Speaker 1: they start making respiratory devices, they start making masks, respirators.

1119
00:53:23,600 --> 00:53:26,080
Speaker 1: Ford really stepped up to the plate. Tell us a

1120
00:53:26,080 --> 00:53:28,120
Speaker 1: little bit about the CEO of Ford.

1121
00:53:29,000 --> 00:53:31,560
Speaker 2: C Ford is a guy named Jim Hackett, and he

1122
00:53:31,640 --> 00:53:34,440
Speaker 2: was hired just a couple of years before the pandemic.

1123
00:53:34,880 --> 00:53:36,520
Speaker 2: It's kind of an odd choice, and actually it's a

1124
00:53:36,520 --> 00:53:38,680
Speaker 2: little bit of an odd duck, Like really came was

1125
00:53:38,719 --> 00:53:41,480
Speaker 2: running one of the biggest office furniture companies in the

1126
00:53:41,520 --> 00:53:48,320
Speaker 2: world before that. Really cerebrobally thoughtful, kind of wonky, a

1127
00:53:48,360 --> 00:53:50,520
Speaker 2: little hard to follow for the kind of like go left,

1128
00:53:50,560 --> 00:53:52,480
Speaker 2: go right crew that are you know, the engineers that

1129
00:53:52,520 --> 00:53:56,600
Speaker 2: work in a place like Ford. And so Ford had

1130
00:53:56,600 --> 00:53:59,000
Speaker 2: had a tough couple of years. They'd come into the

1131
00:53:59,000 --> 00:54:04,440
Speaker 2: pandemic incredibly leveraged, huge amounts of debt. They lose their

1132
00:54:04,640 --> 00:54:07,239
Speaker 2: investment grade credit rating pretty early on. I got to

1133
00:54:07,239 --> 00:54:09,239
Speaker 2: cut their dividend. I mean, is a company that is

1134
00:54:09,280 --> 00:54:12,600
Speaker 2: in mortal trouble because every piece of its supply chain

1135
00:54:12,640 --> 00:54:14,680
Speaker 2: and its business doesn't work right. You can't have people

1136
00:54:14,719 --> 00:54:17,560
Speaker 2: making cars. No one's gonna buy. No one's gonna buy

1137
00:54:17,560 --> 00:54:19,640
Speaker 2: a car. And even if they wanted to, the idea

1138
00:54:19,680 --> 00:54:21,480
Speaker 2: that they would go into a dealership and sit in

1139
00:54:21,520 --> 00:54:23,719
Speaker 2: a car that someone else had just tested her and

1140
00:54:23,920 --> 00:54:26,239
Speaker 2: got yeah, you got to remember like it wasn't gonna work.

1141
00:54:26,280 --> 00:54:31,440
Speaker 2: And then this whole huge finance business that is just

1142
00:54:31,640 --> 00:54:34,200
Speaker 2: massively at the mercy of credit markets and rates that was,

1143
00:54:34,320 --> 00:54:38,520
Speaker 2: you know, really high wire act. And so you know,

1144
00:54:38,560 --> 00:54:40,239
Speaker 2: I think the story of Ford that I tell is

1145
00:54:40,239 --> 00:54:42,359
Speaker 2: sort of in two pieces. One is that which is

1146
00:54:42,480 --> 00:54:45,719
Speaker 2: they almost failed. Of all the companies that I looked at,

1147
00:54:45,880 --> 00:54:49,080
Speaker 2: I think became the closest and ultimately were saved by

1148
00:54:49,680 --> 00:54:54,719
Speaker 2: a pretty interesting bit of diplomacy, which is that you

1149
00:54:54,840 --> 00:54:57,120
Speaker 2: remember in the spring of twenty twenty, and we talked

1150
00:54:57,160 --> 00:54:59,600
Speaker 2: a little bit earlier about the government's response, which is

1151
00:54:59,640 --> 00:55:01,399
Speaker 2: that they did in about six weeks when it took

1152
00:55:01,440 --> 00:55:03,200
Speaker 2: them six or nine months to do in O eight

1153
00:55:03,360 --> 00:55:05,680
Speaker 2: just stand up a lot of these backstop facilities, figure

1154
00:55:05,680 --> 00:55:07,799
Speaker 2: out where the pain is, what they should buy, what

1155
00:55:07,800 --> 00:55:10,440
Speaker 2: they should put a floor under, and they start to

1156
00:55:10,440 --> 00:55:14,520
Speaker 2: buy corporate bonds, which is a pretty dramatic step to take.

1157
00:55:14,600 --> 00:55:17,839
Speaker 2: I mean, that's really government's picking winners and losers, which

1158
00:55:17,880 --> 00:55:21,960
Speaker 2: is very un American. And but do you have to

1159
00:55:21,960 --> 00:55:24,200
Speaker 2: be an investment grade to have your bonds be eligible

1160
00:55:24,200 --> 00:55:26,279
Speaker 2: for this facility that the Fed and the Treasury is

1161
00:55:26,280 --> 00:55:31,080
Speaker 2: standing up and Ford had lost it. And Jim Hackett,

1162
00:55:31,520 --> 00:55:33,279
Speaker 2: who spent a lot of time in Washington, I think

1163
00:55:33,320 --> 00:55:34,919
Speaker 2: he was on the board of Fifth Third for a while.

1164
00:55:34,960 --> 00:55:38,279
Speaker 2: So like, no, it's pretty well connected in finance, calls

1165
00:55:38,360 --> 00:55:42,359
Speaker 2: Larry Fink Blackrock and says who's who's doing the bond

1166
00:55:42,360 --> 00:55:43,840
Speaker 2: buying for the government, says, listen, I don't want to

1167
00:55:43,840 --> 00:55:45,440
Speaker 2: put you in a weird spot. I'm not trying to

1168
00:55:45,480 --> 00:55:47,480
Speaker 2: be inappropriate, but like Ford is the kind of we're

1169
00:55:47,480 --> 00:55:50,399
Speaker 2: acting the way that you guys want companies to act, Like,

1170
00:55:50,719 --> 00:55:52,879
Speaker 2: we're not laying we got a union contract, we're trying

1171
00:55:52,920 --> 00:55:55,680
Speaker 2: to be responsible, we're trying to be thoughtful. But when

1172
00:55:55,680 --> 00:55:57,040
Speaker 2: we come out on the back of this, like do

1173
00:55:57,040 --> 00:56:03,759
Speaker 2: you want a thriving industrial heartland sector or not? And

1174
00:56:03,840 --> 00:56:05,879
Speaker 2: very quietly there's a change made to that program, which

1175
00:56:05,920 --> 00:56:07,719
Speaker 2: is that if you had been investment grade I think

1176
00:56:07,760 --> 00:56:10,440
Speaker 2: back in the pre pandemic, your bonds are eligible. And

1177
00:56:10,480 --> 00:56:12,879
Speaker 2: on the back of that, Ford launches the largest JUNGK

1178
00:56:12,880 --> 00:56:15,680
Speaker 2: fond offering in history, massively over subscribed, ends up at

1179
00:56:15,800 --> 00:56:17,480
Speaker 2: I think eight and a half billion, I don't remember,

1180
00:56:17,719 --> 00:56:20,680
Speaker 2: which really saves it. So you take away from that

1181
00:56:20,760 --> 00:56:21,799
Speaker 2: anecdote what you want.

1182
00:56:22,880 --> 00:56:24,480
Speaker 1: But it helps to know people.

1183
00:56:24,520 --> 00:56:27,000
Speaker 2: It helps to know people. Also, I think I think

1184
00:56:27,040 --> 00:56:29,600
Speaker 2: it was the right move. Like Ford obviously a strong,

1185
00:56:29,640 --> 00:56:32,200
Speaker 2: important company and was waylaid by this. But the other

1186
00:56:32,239 --> 00:56:35,360
Speaker 2: story that that you're talking about is it's a company

1187
00:56:35,800 --> 00:56:39,160
Speaker 2: and again, like I understand now that it will people

1188
00:56:39,200 --> 00:56:41,120
Speaker 2: will roll their eyes, but at the time there was

1189
00:56:41,160 --> 00:56:43,040
Speaker 2: a real it's a big deal. It was a big deal,

1190
00:56:43,080 --> 00:56:45,960
Speaker 2: and it was. There was a real earnestness when you.

1191
00:56:45,920 --> 00:56:48,879
Speaker 1: See surgeons come out wearing garbage bags because they don't

1192
00:56:48,880 --> 00:56:51,439
Speaker 1: have gowns, they don't have gloves, they don't have masks. Hey,

1193
00:56:51,480 --> 00:56:53,200
Speaker 1: something's gone terribly wrong.

1194
00:56:53,040 --> 00:56:54,520
Speaker 2: Totally, and the fact that it ended up on the

1195
00:56:54,520 --> 00:56:56,919
Speaker 2: private sector to solve it is insane. But that's where

1196
00:56:56,920 --> 00:56:59,440
Speaker 2: it was. And Ford is a company that that bleeds

1197
00:56:59,440 --> 00:57:02,960
Speaker 2: American right. They made bombers during World War Two, they

1198
00:57:03,000 --> 00:57:07,239
Speaker 2: made iron lungs for polio patients, and and and it's

1199
00:57:07,239 --> 00:57:09,080
Speaker 2: a little bit of I think this sort of faded

1200
00:57:09,200 --> 00:57:14,360
Speaker 2: corporate titan trying to reinsert itself in the national narrative.

1201
00:57:14,360 --> 00:57:17,120
Speaker 2: It was a little bit of that, but but.

1202
00:57:17,080 --> 00:57:17,960
Speaker 1: It was also the right thing.

1203
00:57:17,960 --> 00:57:19,040
Speaker 2: But it was the right thing to do, and I

1204
00:57:19,080 --> 00:57:21,240
Speaker 2: think they deserve a lot of credit for it. I mean, ultimately,

1205
00:57:22,320 --> 00:57:24,320
Speaker 2: the not a ton of respirator turns out that they're

1206
00:57:24,440 --> 00:57:27,160
Speaker 2: very complicated to made. But they made these. If you remember,

1207
00:57:27,200 --> 00:57:30,800
Speaker 2: one of the real concerns was that healthcare workers themselves

1208
00:57:30,800 --> 00:57:31,600
Speaker 2: were getting.

1209
00:57:31,320 --> 00:57:33,720
Speaker 1: Sick, didn't have masks, didn't have masks.

1210
00:57:33,400 --> 00:57:36,360
Speaker 2: And so they made these kind of like hoods like

1211
00:57:36,440 --> 00:57:41,400
Speaker 2: respirators that actually just cleaned, yeah, exactly, and so and

1212
00:57:41,440 --> 00:57:44,680
Speaker 2: they I think they used it was the fan belt

1213
00:57:44,680 --> 00:57:46,960
Speaker 2: from like a Ford F one fifty because it was

1214
00:57:46,960 --> 00:57:48,880
Speaker 2: a They called it Project Apollo because you remember that

1215
00:57:48,920 --> 00:57:52,080
Speaker 2: scene in Apollo third right that they dump everything they

1216
00:57:52,080 --> 00:57:53,520
Speaker 2: have on the table and say, what can we build

1217
00:57:53,560 --> 00:57:55,480
Speaker 2: with this? And so they used I think the rest

1218
00:57:55,880 --> 00:57:58,200
Speaker 2: the fan blower from the truck. They used to walt

1219
00:57:58,680 --> 00:57:59,440
Speaker 2: power tool.

1220
00:57:59,240 --> 00:58:01,800
Speaker 1: Batteries, right, that's on the assembly line.

1221
00:58:01,840 --> 00:58:04,800
Speaker 2: Because again, there's so much like grimness baked into these decisions,

1222
00:58:04,880 --> 00:58:06,640
Speaker 2: because the concern was that we were going to be

1223
00:58:06,680 --> 00:58:09,840
Speaker 2: standing up field hospitals, right, and you don't have electricity,

1224
00:58:10,160 --> 00:58:12,480
Speaker 2: so you have to find things that run on battery

1225
00:58:12,520 --> 00:58:16,640
Speaker 2: packs or pneumatic power. I mean, just really dark stop,

1226
00:58:16,880 --> 00:58:19,000
Speaker 2: really really interesting Tingency planning here was brutal.

1227
00:58:19,120 --> 00:58:22,600
Speaker 1: So you talk about Treasury did great, the White House

1228
00:58:22,720 --> 00:58:25,800
Speaker 1: not so much. What about the Federal Reserve? Did they

1229
00:58:25,840 --> 00:58:27,760
Speaker 1: have much of a role here? I mean rates were

1230
00:58:27,800 --> 00:58:31,080
Speaker 1: cheap anyway, what's the difference between one percent and zero

1231
00:58:31,120 --> 00:58:32,000
Speaker 1: percent at that point?

1232
00:58:32,360 --> 00:58:34,480
Speaker 2: I mean there's two places where you can be fairly

1233
00:58:34,600 --> 00:58:38,200
Speaker 2: critical of the FED. One was before all of this,

1234
00:58:38,320 --> 00:58:41,160
Speaker 2: which is they had a really hard time turning off

1235
00:58:41,200 --> 00:58:43,000
Speaker 2: the tap in the twenty tens.

1236
00:58:42,880 --> 00:58:44,959
Speaker 1: Getting through could not they could not.

1237
00:58:44,840 --> 00:58:47,120
Speaker 2: Get interest rates up, which meant that they didn't have

1238
00:58:47,360 --> 00:58:49,720
Speaker 2: a lot of wiggle room. To your point, you know,

1239
00:58:49,920 --> 00:58:52,640
Speaker 2: crisis hits, the first thing you do, obviously is large registrates,

1240
00:58:53,240 --> 00:58:55,280
Speaker 2: and they did, and that's fine, but it would have

1241
00:58:55,280 --> 00:58:56,960
Speaker 2: been a lot better if they were starting, say where

1242
00:58:56,960 --> 00:58:58,800
Speaker 2: we are today at four or five and going to

1243
00:58:59,320 --> 00:58:59,840
Speaker 2: one or two.

1244
00:59:00,040 --> 00:59:00,800
Speaker 1: And the second thing.

1245
00:59:01,440 --> 00:59:02,920
Speaker 2: The second thing is they were massed. They were way

1246
00:59:02,920 --> 00:59:03,640
Speaker 2: behind the curve.

1247
00:59:03,480 --> 00:59:05,520
Speaker 1: On inflation on the way out, no doubt about it.

1248
00:59:05,520 --> 00:59:08,200
Speaker 2: You really thought it would be temporary, and it wasn't.

1249
00:59:08,240 --> 00:59:08,960
Speaker 2: And then by the way they.

1250
00:59:08,960 --> 00:59:13,600
Speaker 1: Well it transitory just is taking longer than expected. If

1251
00:59:13,640 --> 00:59:17,080
Speaker 1: you go back and look at CPI in March twenty

1252
00:59:17,160 --> 00:59:22,320
Speaker 1: twenty one, that crossed through abruptly their two percent target,

1253
00:59:22,760 --> 00:59:25,200
Speaker 1: and they sit on their hands for a full year

1254
00:59:25,720 --> 00:59:28,600
Speaker 1: after it goes through two percent and continues to go higher.

1255
00:59:28,920 --> 00:59:32,800
Speaker 1: I can't explain that. I don't understand that other than

1256
00:59:32,800 --> 00:59:36,600
Speaker 1: the fact that historically they're always late to the party.

1257
00:59:37,520 --> 00:59:40,160
Speaker 2: I think that's right. But I think you saw like

1258
00:59:40,520 --> 00:59:45,880
Speaker 2: a diverging playbook, which is anything on the fiscal side.

1259
00:59:46,080 --> 00:59:49,080
Speaker 2: They overdid it right, and on the monetary side they underdid.

1260
00:59:48,720 --> 00:59:53,160
Speaker 1: It, and until they panicked and overreacted and raise rates

1261
00:59:53,200 --> 00:59:54,880
Speaker 1: so fast they began to break things.

1262
00:59:54,760 --> 00:59:57,720
Speaker 2: One hundred percent. And I would say probably the reason

1263
00:59:57,760 --> 01:00:01,000
Speaker 2: that Congress overdid it is that they are lectible. Right,

1264
01:00:01,240 --> 01:00:02,400
Speaker 2: people like getting checked right.

1265
01:00:02,560 --> 01:00:06,040
Speaker 1: Nobody doesn't get reelected because the fiscal stimulus was too big.

1266
01:00:06,120 --> 01:00:08,960
Speaker 2: No, and like maybe someone at the Fed doesn't get reappointed.

1267
01:00:08,960 --> 01:00:12,320
Speaker 2: But that's such like an arcane, just like a different discussion.

1268
01:00:12,360 --> 01:00:15,200
Speaker 2: There's lesson at stake there. Clearly they were late. I

1269
01:00:15,240 --> 01:00:18,360
Speaker 2: would say probably by two meetings, maybe three to six months,

1270
01:00:18,400 --> 01:00:20,040
Speaker 2: depending on how you do it. They should have started

1271
01:00:20,040 --> 01:00:21,160
Speaker 2: in the fall of twenty.

1272
01:00:21,600 --> 01:00:24,160
Speaker 1: I would say summer of twenty one. But we're just

1273
01:00:24,240 --> 01:00:26,600
Speaker 1: nitpicking at this point. All right, So we talk about

1274
01:00:26,600 --> 01:00:31,000
Speaker 1: White House, the CDC, the FED, Treasury, let's talk about

1275
01:00:31,040 --> 01:00:33,760
Speaker 1: a couple of states. Because you don't really get into

1276
01:00:33,880 --> 01:00:37,200
Speaker 1: this very deeply in the book, but you briefly touch

1277
01:00:37,280 --> 01:00:43,360
Speaker 1: upon it. Hold aside his other woes, but there seemed

1278
01:00:43,400 --> 01:00:46,280
Speaker 1: to be a void coming out of the White House,

1279
01:00:46,840 --> 01:00:51,080
Speaker 1: and into that vacuum steps Governor Andrew Cuomo with a

1280
01:00:51,200 --> 01:00:56,000
Speaker 1: daily briefing that felt like, oh, someone's talking to us honestly,

1281
01:00:56,800 --> 01:00:58,960
Speaker 1: like we're adults. It was a breath of fresh air.

1282
01:00:59,480 --> 01:01:01,280
Speaker 2: You hit it. So one thing that I think is

1283
01:01:01,280 --> 01:01:02,800
Speaker 2: is true, and I might take in a different direction,

1284
01:01:02,800 --> 01:01:06,000
Speaker 2: which to this huge vacuum of public sector leadership coming

1285
01:01:06,040 --> 01:01:08,480
Speaker 2: out of Washington at a time that it was badly needed.

1286
01:01:08,960 --> 01:01:10,960
Speaker 2: My takeaway from that is, actually the CEO has kind

1287
01:01:10,960 --> 01:01:14,720
Speaker 2: of stepped in, and I think part of the reason that,

1288
01:01:15,400 --> 01:01:17,800
Speaker 2: you know, I think they kind of frankly wish they hadn't,

1289
01:01:17,840 --> 01:01:20,760
Speaker 2: because really put themselves squarely in what I would now

1290
01:01:20,840 --> 01:01:22,040
Speaker 2: kind of call the culture wars.

1291
01:01:22,120 --> 01:01:26,360
Speaker 1: Right, Yeah, how dare you try and say, fellow Americans

1292
01:01:26,400 --> 01:01:28,040
Speaker 1: from dying, who do you think.

1293
01:01:27,880 --> 01:01:29,600
Speaker 2: You how dare you try to do anything that doesn't

1294
01:01:29,640 --> 01:01:31,400
Speaker 2: have to do with running your business day to day,

1295
01:01:31,400 --> 01:01:32,880
Speaker 2: which is what a lot of the sort of pandemic

1296
01:01:33,000 --> 01:01:33,880
Speaker 2: leadership involved.

1297
01:01:34,320 --> 01:01:36,080
Speaker 1: Before we let you go, we're going to get to

1298
01:01:36,240 --> 01:01:39,040
Speaker 1: our favorite questions that we ask all of our guests,

1299
01:01:39,760 --> 01:01:42,760
Speaker 1: starting with tell us what you're streaming these days? What

1300
01:01:42,800 --> 01:01:46,480
Speaker 1: are you watching listening to? What's what's keeping you entertained?

1301
01:01:46,760 --> 01:01:49,360
Speaker 1: What kept you entertained during the lockdown?

1302
01:01:50,040 --> 01:01:52,240
Speaker 2: Well, I about a year ago quit my job at

1303
01:01:52,240 --> 01:01:53,960
Speaker 2: the wall Stree Journal and joined a startup. So I

1304
01:01:54,360 --> 01:01:56,640
Speaker 2: know this sounds terrible. I should don't have that. It's

1305
01:01:56,640 --> 01:01:58,480
Speaker 2: called Semaphore. I can sign up.

1306
01:01:59,280 --> 01:02:03,080
Speaker 1: Actually get you daily Flagshriffic. Yes, I get Flagship and

1307
01:02:03,120 --> 01:02:03,560
Speaker 1: it's great.

1308
01:02:03,680 --> 01:02:05,680
Speaker 2: I'll also sign you up for business before we leave.

1309
01:02:06,800 --> 01:02:09,120
Speaker 2: But uh, but so I actually tragically like have less

1310
01:02:09,160 --> 01:02:12,320
Speaker 2: time for television than I used to. But I'm obviously

1311
01:02:12,320 --> 01:02:15,200
Speaker 2: watching succession. I just watched The Diplomat on that FLI

1312
01:02:15,320 --> 01:02:15,640
Speaker 2: I love that.

1313
01:02:15,760 --> 01:02:18,480
Speaker 1: We're in episode seven. It's great. It's very good, really

1314
01:02:18,560 --> 01:02:22,280
Speaker 1: well written, like almost believable in a strange way.

1315
01:02:22,440 --> 01:02:24,320
Speaker 2: It's like if The Americans was a rom com. That's

1316
01:02:24,360 --> 01:02:27,520
Speaker 2: why I enjoyed it. But like, but one thing that

1317
01:02:27,600 --> 01:02:30,960
Speaker 2: I did like genuinely love about the pandemic, and obviously

1318
01:02:31,000 --> 01:02:33,600
Speaker 2: with all the caveats around that that belong there, one

1319
01:02:33,640 --> 01:02:36,560
Speaker 2: thing that I genuinely loved about some of the darkest

1320
01:02:36,640 --> 01:02:38,320
Speaker 2: days of the pandemic were just these the way these

1321
01:02:38,320 --> 01:02:41,080
Speaker 2: things become cultural phenomenons, like something we're just hit. So

1322
01:02:41,200 --> 01:02:43,040
Speaker 2: Tiger King, just like all An.

1323
01:02:43,160 --> 01:02:46,120
Speaker 1: Was watchable, but I love people loved it.

1324
01:02:46,240 --> 01:02:49,480
Speaker 2: Right. I'm not a reality television person at all, but

1325
01:02:49,480 --> 01:02:51,440
Speaker 2: got sucked into Love is Blind because it was so

1326
01:02:51,480 --> 01:02:54,240
Speaker 2: insane and everyone was talking about it. These things kind of.

1327
01:02:54,160 --> 01:02:59,480
Speaker 1: Became Did you watch John Krakinski's weekly.

1328
01:02:59,400 --> 01:03:03,240
Speaker 2: Video, How Delightful? And it's one of those things that

1329
01:03:03,440 --> 01:03:04,960
Speaker 2: now you look at it and you're like, god, it

1330
01:03:04,960 --> 01:03:08,400
Speaker 2: feels saccharin and sort of chanting, really corporate sponsored and

1331
01:03:08,480 --> 01:03:10,000
Speaker 2: was all. But at the time it was like, really

1332
01:03:10,080 --> 01:03:11,280
Speaker 2: was genuinely.

1333
01:03:11,320 --> 01:03:15,320
Speaker 1: Fun and you know you loved him already. It's like, oh, no,

1334
01:03:15,400 --> 01:03:16,640
Speaker 1: wonder Emily Blunt married.

1335
01:03:16,880 --> 01:03:21,960
Speaker 2: He's delightful, delightful. They were all delightful. No, there was something.

1336
01:03:22,000 --> 01:03:25,000
Speaker 2: There's some I'm not a culture reporter, and culture reporter

1337
01:03:25,000 --> 01:03:26,840
Speaker 2: I would say it better, but there was something like

1338
01:03:26,880 --> 01:03:30,240
Speaker 2: some weird earnest monoculture that was kind of simmering during

1339
01:03:30,240 --> 01:03:32,200
Speaker 2: a lot of the pandemic that I miss a little bit.

1340
01:03:32,200 --> 01:03:34,640
Speaker 1: Actually, you know, when you go back to World War

1341
01:03:34,640 --> 01:03:39,040
Speaker 1: One and the popular entertainment of the day, it doesn't

1342
01:03:39,080 --> 01:03:41,360
Speaker 1: look sacherin and every now and then, even during World

1343
01:03:41,400 --> 01:03:45,120
Speaker 1: War Two, some of the Hollywood movies are a little

1344
01:03:45,200 --> 01:03:48,640
Speaker 1: jingoistic and a little We just saw some movie with

1345
01:03:48,760 --> 01:03:50,640
Speaker 1: Carrie Grant and I'm trying to remember who it was

1346
01:03:51,080 --> 01:03:54,920
Speaker 1: where she's married to a German who turns out to

1347
01:03:54,960 --> 01:03:57,400
Speaker 1: be an Austrian who turns out to be a Nazi,

1348
01:03:57,680 --> 01:04:00,160
Speaker 1: and he's trying to get her out of Europe and

1349
01:04:00,200 --> 01:04:04,680
Speaker 1: it's like there's just a time and she gives her

1350
01:04:04,720 --> 01:04:09,320
Speaker 1: passport to the maid in Poland who's Jewish, Like it

1351
01:04:09,400 --> 01:04:13,440
Speaker 1: wasn't jingoistic. I can't remember the name of it, something Honeymoon,

1352
01:04:13,560 --> 01:04:14,280
Speaker 1: something like that.

1353
01:04:14,320 --> 01:04:18,480
Speaker 2: But I'm actually surprised at how little pandemic media there was.

1354
01:04:18,520 --> 01:04:20,840
Speaker 2: Not a lot of movies have come out. There's one

1355
01:04:21,000 --> 01:04:23,520
Speaker 2: like Anne Hathaway and what's his name? That was kind

1356
01:04:23,560 --> 01:04:25,840
Speaker 2: of interesting, but I actually think we just haven't really

1357
01:04:25,880 --> 01:04:27,120
Speaker 2: grappled with it as a culture.

1358
01:04:27,280 --> 01:04:31,120
Speaker 1: Bo Burnham is the closest terrific, that's the closest thing

1359
01:04:31,160 --> 01:04:35,960
Speaker 1: to a pandemic popular culture thing that that was really

1360
01:04:36,600 --> 01:04:40,160
Speaker 1: really quite fascinating. Yeah, sorry, Next question, tell us about

1361
01:04:40,160 --> 01:04:42,280
Speaker 1: your mentors who helped shape your career.

1362
01:04:43,840 --> 01:04:46,240
Speaker 2: You know, when I first joined the Wall Street Journal,

1363
01:04:46,240 --> 01:04:48,800
Speaker 2: I sat right behind Dana Simaluca, who was then the

1364
01:04:48,840 --> 01:04:50,680
Speaker 2: deputy M and A editor has now been the M

1365
01:04:50,680 --> 01:04:53,520
Speaker 2: and A editor for a long time, and he was

1366
01:04:53,520 --> 01:04:55,960
Speaker 2: the first person who really taught me about kind of

1367
01:04:55,960 --> 01:04:58,400
Speaker 2: the dark art of some kinds of journalism, and it

1368
01:04:58,520 --> 01:05:01,880
Speaker 2: was just really learned how to m and A is

1369
01:05:01,920 --> 01:05:05,000
Speaker 2: a funny beat because most stories are basically one fact,

1370
01:05:05,160 --> 01:05:10,080
Speaker 2: but that fact absolutely has to be right, and it's

1371
01:05:10,120 --> 01:05:12,680
Speaker 2: sort of unique in that way. I think, and learned

1372
01:05:12,720 --> 01:05:17,440
Speaker 2: a lot from him about how to handle really sensitive

1373
01:05:17,440 --> 01:05:19,720
Speaker 2: stuff and you know, a little bit a little of

1374
01:05:19,720 --> 01:05:22,960
Speaker 2: black magic that goes on in certain beats, So I

1375
01:05:23,000 --> 01:05:25,960
Speaker 2: really I learned a lot from him. Then my boss

1376
01:05:25,960 --> 01:05:29,120
Speaker 2: after that was Marie Boudette, a totally different kind of editor.

1377
01:05:29,240 --> 01:05:31,520
Speaker 2: Never really was a beat reporter in the traditional sense,

1378
01:05:31,600 --> 01:05:35,439
Speaker 2: but had incredibly good instincts about stories and really great

1379
01:05:35,520 --> 01:05:39,800
Speaker 2: judgment and encourage me to be more authoritative and ambitious

1380
01:05:39,920 --> 01:05:43,000
Speaker 2: in the stories that I was telling. And I've only

1381
01:05:43,040 --> 01:05:44,680
Speaker 2: been working for him for less than a year, but

1382
01:05:44,760 --> 01:05:46,520
Speaker 2: you know, I've learned a lot from from Ben Smith,

1383
01:05:46,520 --> 01:05:49,439
Speaker 2: who's our editor in chief, and I was really trying

1384
01:05:49,440 --> 01:05:51,800
Speaker 2: to trying to build a new kind of journalism and

1385
01:05:51,840 --> 01:05:52,960
Speaker 2: we're having a lot of fun doing it.

1386
01:05:53,440 --> 01:05:56,400
Speaker 1: Really really interesting. Let's talk about books. What are some

1387
01:05:56,480 --> 01:05:58,800
Speaker 1: of your favorite and what have you been reading recently.

1388
01:05:59,640 --> 01:06:02,640
Speaker 2: I am, perhaps disappointingly like I read a lot of

1389
01:06:03,160 --> 01:06:06,240
Speaker 2: non I read almost exclusively nonfiction. I read a lot

1390
01:06:06,320 --> 01:06:08,880
Speaker 2: of nonfiction. I'm like, I can escape my job.

1391
01:06:08,760 --> 01:06:10,920
Speaker 1: In my very time. I got this is business nonfiction.

1392
01:06:11,120 --> 01:06:13,280
Speaker 2: I wrote the kind of book that I like to read. Really,

1393
01:06:14,440 --> 01:06:16,480
Speaker 2: you know. I had COVID actually for the first time

1394
01:06:16,520 --> 01:06:17,880
Speaker 2: around Christmas of last.

1395
01:06:17,760 --> 01:06:20,840
Speaker 1: Year, and I re read November for Yeah, it's.

1396
01:06:20,720 --> 01:06:24,840
Speaker 2: Funny if you if you get the audio book which

1397
01:06:24,880 --> 01:06:27,280
Speaker 2: I recorded, I did it that week between Christmas and

1398
01:06:27,280 --> 01:06:28,840
Speaker 2: New Year's because it takes a couple of days and

1399
01:06:28,920 --> 01:06:30,920
Speaker 2: I have a full time job, and I had COVID,

1400
01:06:30,920 --> 01:06:33,360
Speaker 2: and so you can kind of hear it. But actually

1401
01:06:33,360 --> 01:06:37,560
Speaker 2: I re read like, uh, Barbarians at the Gate Den

1402
01:06:37,600 --> 01:06:41,720
Speaker 2: of Thieves, like those old those old really great yarns

1403
01:06:41,960 --> 01:06:45,960
Speaker 2: us a great and then there's a new generation to them.

1404
01:06:45,960 --> 01:06:48,480
Speaker 2: That I really loved that that friends and colleagues and

1405
01:06:48,480 --> 01:06:51,280
Speaker 2: competitors of mine have written. Trip Michael had a great

1406
01:06:51,280 --> 01:06:53,040
Speaker 2: book come out last year about Apple. He was my

1407
01:06:53,040 --> 01:06:56,000
Speaker 2: colleague at the Wall book He's Gonna Kill Me. It's

1408
01:06:56,000 --> 01:07:01,560
Speaker 2: called After Steve, which I really love. Another former colleague,

1409
01:07:01,640 --> 01:07:04,600
Speaker 2: Eric Schwartzel, wrote this great book called Red Carpet about

1410
01:07:05,320 --> 01:07:08,800
Speaker 2: Hollywood and China and soft power and business and commerce.

1411
01:07:08,840 --> 01:07:11,960
Speaker 2: That's fantastic. And again he's going to think I'm just

1412
01:07:12,040 --> 01:07:14,520
Speaker 2: buttering him up. But my boss Ben had a great

1413
01:07:14,520 --> 01:07:17,520
Speaker 2: book come out a couple of weeks ago, really fortuitously time,

1414
01:07:17,600 --> 01:07:21,560
Speaker 2: but about this era of viral digital media that has

1415
01:07:21,640 --> 01:07:24,400
Speaker 2: just now completely come crashing to an end. I thought

1416
01:07:24,440 --> 01:07:26,080
Speaker 2: that was a great called Traffic.

1417
01:07:26,320 --> 01:07:30,600
Speaker 1: Traffic really really intriguing. Our final two questions, what sort

1418
01:07:30,600 --> 01:07:32,920
Speaker 1: of advice would you give to a recent college grad

1419
01:07:33,480 --> 01:07:35,920
Speaker 1: interested in a career in journalism.

1420
01:07:36,120 --> 01:07:37,840
Speaker 2: People have been talking about the death of journalism for

1421
01:07:37,840 --> 01:07:42,560
Speaker 2: a long time, and it's extremely true in local journalism,

1422
01:07:42,800 --> 01:07:44,880
Speaker 2: which is where I really kind of wanted to go.

1423
01:07:45,160 --> 01:07:48,720
Speaker 2: I wanted to apply to newspapers in Boulder and Topeka,

1424
01:07:48,800 --> 01:07:52,440
Speaker 2: and it was right at the sort of the start

1425
01:07:52,480 --> 01:07:54,760
Speaker 2: of the end for them. This was two thousand and eight.

1426
01:07:55,120 --> 01:07:58,080
Speaker 2: You know, Facebook was and Craigslists were just killing their

1427
01:07:58,080 --> 01:08:00,880
Speaker 2: ad business and they hadn't totally been hollowed out yet,

1428
01:08:00,880 --> 01:08:03,680
Speaker 2: but they were getting there. I feel like there will

1429
01:08:03,680 --> 01:08:06,080
Speaker 2: always be demand for smart people to make sense of

1430
01:08:06,120 --> 01:08:09,600
Speaker 2: an incredibly complicated world. Just sort of be agnostic about

1431
01:08:09,600 --> 01:08:10,160
Speaker 2: where that is.

1432
01:08:11,000 --> 01:08:11,120
Speaker 1: You know.

1433
01:08:11,160 --> 01:08:15,720
Speaker 2: Again, first, I've had four jobs basically in journalism. One

1434
01:08:15,800 --> 01:08:18,840
Speaker 2: was again at a parenting magazine in the Midwest, at

1435
01:08:18,880 --> 01:08:21,800
Speaker 2: a legal trade publication in New York, at the Wall

1436
01:08:21,840 --> 01:08:24,560
Speaker 2: Street Journal, and then a thing that didn't exist a

1437
01:08:24,680 --> 01:08:28,600
Speaker 2: year ago. So you know, you pick up skills at

1438
01:08:28,600 --> 01:08:29,920
Speaker 2: every one of them.

1439
01:08:29,960 --> 01:08:32,960
Speaker 1: Really interesting and our final question, what do you know

1440
01:08:33,000 --> 01:08:37,760
Speaker 1: about the world of journalism and investigative reporting today you

1441
01:08:37,800 --> 01:08:40,280
Speaker 1: wish you knew ten fifteen years ago when you were

1442
01:08:40,280 --> 01:08:41,160
Speaker 1: first getting started.

1443
01:08:41,400 --> 01:08:44,800
Speaker 2: It's better to be lucky than good. If you can

1444
01:08:44,920 --> 01:08:47,559
Speaker 2: be both, that's great, And I look, I think you

1445
01:08:47,560 --> 01:08:50,519
Speaker 2: put yourself in a position to get lucky, but I

1446
01:08:50,560 --> 01:08:52,200
Speaker 2: don't know. My one piece of advice I spiascit he

1447
01:08:52,240 --> 01:08:54,400
Speaker 2: is always take the meeting. Just you literally never know.

1448
01:08:54,400 --> 01:08:56,040
Speaker 1: And always take the meeting.

1449
01:08:56,160 --> 01:08:58,639
Speaker 2: There's this eighty twenty rule in journalism people talk about,

1450
01:08:58,640 --> 01:09:00,439
Speaker 2: which is that eighty percent of tips come from twenty

1451
01:09:00,439 --> 01:09:03,360
Speaker 2: percent of sources. These are like professional sources who know

1452
01:09:03,400 --> 01:09:05,840
Speaker 2: what the deal is. But I will tell you that

1453
01:09:05,880 --> 01:09:08,679
Speaker 2: long tail is really long and you get really interesting

1454
01:09:08,760 --> 01:09:10,400
Speaker 2: stuff if you're willing to spend some time on it.

1455
01:09:10,600 --> 01:09:13,000
Speaker 1: Huh, really quite fascinating. Liz, thank you for being so

1456
01:09:13,120 --> 01:09:17,120
Speaker 1: generous with your time. We have been speaking with Liz Hoffman.

1457
01:09:17,280 --> 01:09:20,720
Speaker 1: She is now the Business and Finance editor at Semaphore

1458
01:09:20,840 --> 01:09:24,120
Speaker 1: and the author of crash Landing, the inside story of

1459
01:09:24,120 --> 01:09:28,840
Speaker 1: how the world's biggest companies survived the pandemic. If you

1460
01:09:29,000 --> 01:09:31,920
Speaker 1: enjoy this conversation, well, be sure and check out any

1461
01:09:31,960 --> 01:09:35,080
Speaker 1: of our previous four hundred and ninety seven that we've

1462
01:09:35,120 --> 01:09:37,840
Speaker 1: done over the past eight and a half years. You

1463
01:09:37,920 --> 01:09:42,040
Speaker 1: can find those at iTunes, Spotify, YouTube, or wherever you

1464
01:09:42,120 --> 01:09:45,759
Speaker 1: find your favorite podcasts. Sign up from my daily reading

1465
01:09:45,800 --> 01:09:49,360
Speaker 1: list at ridolts dot com, Follow me on Twitter at Ridolt's,

1466
01:09:49,840 --> 01:09:54,280
Speaker 1: follow all of our fine family of Bloomberg podcasts at

1467
01:09:54,439 --> 01:09:57,280
Speaker 1: podcast I would be remiss if I did not thank

1468
01:09:57,360 --> 01:10:01,439
Speaker 1: the crack team that helps put these conversations together each week.

1469
01:10:02,120 --> 01:10:06,160
Speaker 1: My audio engineer is Sarah Livesley. Paris Wald is my producer.

1470
01:10:06,400 --> 01:10:09,320
Speaker 1: Sean Russo is my head of research at Teko of

1471
01:10:09,360 --> 01:10:13,519
Speaker 1: al bron is our project manager. I'm Barry Ridholtz. You've

1472
01:10:13,520 --> 01:10:18,080
Speaker 1: been listening to Masters in Business on Bloomberg Radio.